Costa Rica Coffee Guide

President Solís proposes global income tax

September 21, 2014

Costa Ricans earning big bucks abroad should take note. Addressing the nation from New York on Sunday evening, President Luis Guillermo Solís announced two new taxes to improve the country’s fiscal revenue, including a global income tax. 

The global income tax, a first of its kind here, would require Costa Ricans to pay taxes on income earned outside the country. Solís, without offering details, said that his government would send the bill to the Legislative Assembly in 2015. 

“It’s clear to me that my administration, the administration of change, will have the obligation to take steps that have not been taken in many years. This will not be easy nor achieved without making sacrifices,” Solís said.  

The president also gave a timetable for when his administration would present a bill to create a value-added tax. The VAT would replace the current 13 percent sales tax while keeping the same rate. Spending on health care and education would be exempt. The bill will be presented to the Assembly before the end of 2014, he said.

Solís said the VAT would improve tax revenues by an estimated $555 million annually. Solís added that the reform would make tax evasion more difficult. The government has previously reported that Costa Rica loses an estimated 13.8 percent of gross domestic product to tax evasion, outpacing tax collection at 13.1 percent of GDP in 2013.

In August, the Solís administration presented a bill granting the government more tools to monitor and tax financial transactions, including a requirement that all businesses accept credit or debit cards as payment. 

The president’s comments follow a downgrade in its sovereign debt rating to junk status, from Baa3 to Ba1, by the ratings agency Moody’s Investor Services.

You may be interested

Costa Rica Coffee Culture at a Crossroads
Coffee
4 views
Coffee
4 views

Costa Rica Coffee Culture at a Crossroads

Steve Hodel - September 27, 2020

The traditional cafe society in Costa Rica has reached a cultural crossroads. Older generations of coffee drinking traditionalists are crossing…

International rejection grows against project that threatens NGOs and journalists in Nicaragua
Costa Rica
784 views
Costa Rica
784 views

International rejection grows against project that threatens NGOs and journalists in Nicaragua

Julia RIOS / AFP - September 27, 2020

International rejection against a bill considered threatening to journalists and human rights defenders in Nicaragua increased Friday with demands that…

Slothy Sunday: Meet the sloth moms, released and thriving
Sloth Sundays
1770 views
Sloth Sundays
1770 views

Slothy Sunday: Meet the sloth moms, released and thriving

Rachael Griffiths / Toucan Rescue Ranch - September 27, 2020

This Sloth Sunday is dedicated to the released two-fingered sloth moms that have been prospering since being in Toucan Rescue Ranch’s…