Sales tax

One of the major proposed changes would swap the current sales tax for a value added tax that would encompass services as well as goods. Tourism activities would be exempt for the first year after the law goes into effect, then charged 5 percent in the second year, 10 percent in the third and 15 percent starting the fourth year.

Delays on the approval of fiscal reforms prompted Fitch Ratings to downgrade Costa Rica's Long-Term currency bonds earlier this month and ratings for six banks, including four state-owned banks.

Airbnb representatives said Costa Rica would be the first Latin American country to approve legislation to regulate sharing economy businesses.

Tourism sector leaders are asking President Luis Guillermo Solís to refrain from filing an appeal against the court's ruling.

Business leaders and opposition party lawmakers have already voiced their opposition to the government's proposed tax reform bills.

One of the major proposed changes would swap the current sales tax for a value added tax that would encompass services as well as goods. Tourism activities would be exempt for the first year after the law goes into effect, then charged 5 percent in the second year, 10 percent in the third and 15 percent starting the fourth year.

President Luis Guillermo Solís on Tuesday evening sent the Legislative Assembly a bill proposing the cancellation of a backlog of sales taxes, interest and fines for tourism businesses as stipulated by a new provision of the country's Sales Tax Law that took effect Aug. 1.

Leaders of the National Tourism Chamber sent President Luis Guillermo Solís a letter asking him to block a Finance Ministry decree ordering tourism businesses to collect sales tax on several tourism activities that were previously exempt.

Concerns by the National Tourism Chamber (CANATUR) became a reality on Friday as the Tax Administration issued an order to businesses to begin charging sales tax on all tourism activities.

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.