The Finance Ministry has asked Congress for the power to order, execute and auction seizures of a delinquent taxpayer’s assets without first obtaining permission from a judge. The bill, filed on July 23 by Vice Minister of Revenue VÃctor Carvajal as part of the government’s fiscal package, would rewrite Title VII of the Tax Code and replace the judicial debt-collection route with an administrative one run inside the ministry. It would apply to anyone who holds a Costa Rican bank account, draws a local salary or pension, or owns registered property in the country.
Under the system in force today, the ministry can already order administrative seizures over salaries, bank accounts and other assets to secure a tax debt. What it cannot do is complete the process on its own. Executing those measures — valuing the asset, auctioning it, applying the proceeds — requires a judicial process in which a judge authorizes the sale. When the ministry suspects a taxpayer is hiding or offloading assets, it must go through the Collections Office, which asks a judge for a precautionary seizure. The judge hears the taxpayer before deciding, and the measure can stand for up to two years.
Under the bill, the title of Tax Code Title VII would change from “Judicial and Extrajudicial Collection” to “Enforcement Procedure,” and the debt certificate issued by the ministry’s own collections units would become the enforcement instrument. Newly created enforcement bodies — each coordinated by a lawyer, operating nationwide and reporting to the Directorate General of Finance — would handle the full sequence: payment demand, seizure, valuation, and then auction, direct sale, or transfer of the asset to the Treasury.
The current law, which currently obliges collection attorneys to take cases to the courts within a month of receiving the file, would be repealed. The Collections Office could make a single attempt at persuasive collection before the process formally begins.
Why the ministry says it needs the power
The ministry’s stated justification addresses the constitutional question directly. Private property deserves protection, it argues, but is not an absolute right and may be limited where the public interest in universal tax payment is engaged. Someone who benefited from public services and did not pay, on that reasoning, cannot invoke property as an unlimited shield against collection. The ministry frames administrative seizure as the practical means of enforcing the constitutional duty to help finance the state, directed at taxpayers who hide or dispose of assets to avoid payment.
The efficiency argument rests on case volume. The Executive cites Judicial Observatory data showing 770,601 judicial collection files pending at the end of April 2026, with an average resolution time of 63 months, or more than five years. The bill’s explanatory statement gives that figure as 63 weeks in its text while the chart in the same document gives months.
What “liquid and enforceable” means
The full enforcement procedure is intended to begin only once a debt is firm — either self-assessed by the taxpayer, or determined by the Directorate General of Taxation or Customs and confirmed after the available challenges have been exhausted, including the Administrative Tax Court and, where applicable, the contentious-administrative courts. A debt still under substantive dispute would not reach the auction stage.
The bill separately authorizes preventive seizures from the determination stage, before the debt is final, where the administration considers there is a risk the taxpayer will conceal, sell or transfer assets. Those measures would run for up to two years, renewable for the same period.
A taxpayer contesting an assessment could therefore have registered property annotated and bank funds frozen while the substantive dispute remains open, without a judge having reviewed the risk finding beforehand. The bill also extends how long a seizure order may remain annotated in the public registry, from three months under current rules to two years, with extensions available where the measure originated as a precautionary one.
Two further provisions reach income the taxpayer has not yet received. The bill expressly authorizes seizure of tax refunds and other payments the administration itself owes the taxpayer, withheld as a precautionary measure while the debt is being determined. It also creates a power to retain cash at the point it is earned: enforcement officers could attend a commercial activity and hold up to 75 percent of that day’s takings, recording an act each day and depositing the money into the state’s single account.
The surcharge and the amount at stake
Mario Hidalgo, tax lead at Grant Thornton, lists an automatic 50 percent surcharge on the amount owed among the reform’s principal changes. On his reading, the surcharge raises the sum subject to seizure from the moment the process opens rather than at its conclusion.
If applied as he describes, the secured amount would be the debt plus half again, before interest and costs. On an assessment of â‚¡40 million — about $87,800 at the Central Bank reference selling rate of â‚¡455.48, published at Friday’s close and carried through the weekend — the exposed total would be roughly â‚¡60 million, or about $131,700.
Deadlines, appeals and what remains with the courts
Once the debt certificate is notified, the taxpayer has 15 business days to pay before a seizure can be ordered. No appeal lies against that initial notification. Other resolutions in the procedure can be appealed to the Administrative Tax Court within three days of notification, and that court would have one month to rule.
The bill lists specific grounds for opposing a seizure, among them that the debt has been extinguished, that it has prescribed, or that the rules governing the seizure were not followed. The administration would have to resolve those objections within ten business days. Filing an objection would not suspend the seizure. Obtaining a payment arrangement would require securing or settling interest and costs.
Judicial involvement does not end. Entering a private home or conducting a search inside one would still require the affected party’s consent or a court order. Judges would retain a role in insolvency proceedings and in challenges brought after a seizure has been carried out materially. Cases already before a judge when the law takes effect would continue under existing rules.
Existing protections on wages remain. The maximum percentages permitted under the Labor Code would continue to apply to salaries and pensions, and assets declared exempt from seizure by other laws would stay protected. The bill keeps the current list of seizable assets and the order in which they may be taken: money in bank accounts, wages and pensions, short-term credits, sums owed by third parties including card payments, receipts from public events, movable property, real estate, commercial and industrial premises, and long-term credits.
Liability beyond the taxpayer
The bill extends joint and several liability to those who conceal assets, disregard seizure orders or assist in transferring them. It also reaches asset-holding companies in which the debtor’s stake, added to a spouse’s, amounts to at least 75 percent. Jointly liable debtors could be included on the published delinquency list.
What tax specialists say
Hidalgo said the bill notes that the body determining the obligation is not the body enforcing it, but that both sit within the same ministry. In his assessment the ministry would in practice be judge and party at once — creditor of the debt, issuer of the enforcement instrument, the authority decreeing the seizure, the party executing it, the valuer of the assets and the auctioneer.
Separating the directorates mitigates the conflict without eliminating it, he said, and he described that separation as a weak defense against the underlying objection. Alongside the surcharge, he listed administrative seizures without prior judicial authorization, broader seizure reach, bank account seizures and reduced scope for immediate challenge among the changes that weaken taxpayer guarantees.
Silvia Castro, a tax partner at Despacho Carvajal, said the reform would introduce coercive executive collection, allowing the administration to collect debts without first going to a judge. She said the objective is to recover taxes already determined under the tax rules and still unpaid, and that removing the need for a separate judicial process in each case would reduce the burden on the courts and speed recovery for the state.
Fernando RodrÃguez, a former vice minister of finance, said collecting overdue taxes has been a long-standing problem for the ministry, attributing it to the absence of mechanisms such as guarantees or insurance to secure repayment. He said the discussion is not new and that previous administrations declined to advance it. He considered the mechanism valid in principle, while adding that any such regime must apply to firm debts, preserve prior due process and provide an appeal route for the taxpayer.
If approved as filed, the law would take effect one year after publication. Cases without a judicial claim already filed would move to the new procedure once the ministry completes its regulations. Two other bills reached Congress the same day and are separate from this one.
One creates a criminal offense of trafficking in false electronic invoices, carrying four to eight years in prison, and would let the ministry publish the names of those involved and disable their invoicing systems; the ministry says chains of companies identified issuing such documents account for more than â‚¡772 billion in invoicing, roughly $1.7 billion. The other reduces several components of the tax burden on cigarettes as an anti-contraband measure. Neither alters the seizure regime, and neither is required for it to advance.
