axation uses 'big data' to search for and ask accounts to evaders
Hacienda (Ministry of Finance) to use ‘big data’ to search for and ask an accounting from tax evaders. Photo La Nacion

(QCOTARICA) The Directorate General of Taxation (Dirección General de Tributación) has hired an external service that cross matches taxpayer data in public databases to identify suspicious patterns that might suggest misconduct.

The project called “Modelo Predictivo” (Predictive Model) started to be implemented by the Ministry of Finance (Ministerio de Hacienda) this year, and aims to analyze the behavior of firms and individuals in order to identify suspicious or unusual patterns in the process of declaration of income and tax payments.

La Nacion reports that “…This is done by cross matching the information contained in their tax and informative declarations with data from public sites, for example, the Civil Registry, the National Registry of Property and listings of employers and insured persons in the Caja Costarricense de Seguro Social (CCSS), among other things.”

If anomalies are identified, the Hacienda,will carry out the appropriate investigation and, “…as a result, individuals and companies may be called on to rectify or correct their tax returns and, therefore, pay penalties that may be equivalent to 100% or 150% of the amount that was not paid.”

Fernando Rodríguez, Deputy Minister of Revenue, explained that this project focuses in three areas.

First is the identification of false suppliers (ie people or companies that were consigned as sellers of products or services that did not exist or were not dedicated to those tasks).

The second is the identification of people with unusual operations. This investigation consists in detecting allegedly anomalous behavior of registered professionals, that includes the concealment of money inflows, the report of higher expenditures than income, the purchase of movable and immovable property and people who assume that they are exempt when in fact they have to tax.

The third group to be analyzed will be importers.

But, Hacienda has a tough task ahead.

José María Oreamuno, a tax lawyer, explained that Hacienda has the power to request information related taxes, whether from the taxpayer or other related parties. However, this power is not unlimited, and conflicts can arise with constitutional principles of protection of the privacy of individuals and Hacienda’s request information.

On the other hand, Ricardo Vargas and Luis Carlos Mondragón, of the firm Oller Abogados, agreed that Hacienda can request any information considered transcendent, as long as it has a justification.


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