• Costa Rica Real Estate

Solís blocks added sales tax on national park entrance fees, a decree passed days before he took office

August 4, 2014

Last Friday, President Luis Guillermo Solís and Environment Minister Edgar Gutiérrez signed a decree eliminating a 15 percent sales tax on national park entrance fees. The act reverses a controversial decree that went into effect last week, angering business owners in the tourism sector.

The previous decree was approved by the administration of ex-President Laura Chinchilla (2010-2014) on April 30 — just days before Solís took office — and became official last Wednesday when it was published in the official newspaper La Gaceta.

Many of Costa Rica’s tourism chambers opposed the measure. National Tourism Chamber (CANATUR) President Pablo Abarca said it originated from an interpretation by Environment Ministry officials of a 2006 Finance Ministry guideline on how the Sales Tax Law – adopted in 1982 – should be applied to recreational activities.

Representatives for CANATUR and the Costa Rican Association of Tour Operators said the decree would have reduce the average stay of foreign tourists  – currently eight to 12 days – by at least one day.

“One day less means losses of some $184 million a year in revenue for us,”  Abarca said in late July.

On Monday, Abarca said tourism chambers were satisfied with Solís’ decision. But Abarca added that another decree could be in the works, and the chamber would oppose any move by the Finance Ministry to add new taxes to tourism activities.

Solis’ decree will become official when published in La Gaceta, likely later this week.

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