(QCOSTARICA) One way to help Costa Rica’s poor by the financially strapped government is by making changes in the way motels are taxed, giving the Instituto Mixto de Ayuda Social (IMAS), more than ¢700 million colones a year to work with.
The additional income, almost triple than what the IMAS currently collects (an expected ¢254 million for this year) would be a reality if legislators approve the bill currently in front of them.
The bill would also authorize the IMAS to close any motel not paying the tax.
The additional revenue would be earmarked for those in extreme povety.
The IMAS (Joint Institute for Social Assistance), is an autonomous institution created in April 1971, with the purposeto serve the population in poverty in Costa Rica through the provision of subsidies and the implementation of programs.
One of those programs is Duty-Free Social Program Shops at the country’s airports, where with every purchase, customers are contributing to programs that aim to reduce extreme poverty in Costa Rica.
At the San Jose (SJO) airport there are 4 shops in the departures area and 2 shops in the arrivals area, open from 5:00am to 9:00pm daily.
With notes from Larepublica.net
whats the change proposed?
If memory serves, the proposed change is to tax the motels by the number of rooms rather than the number of occupants. The theory is that occupants almost always pay cash and neither ask for nor want a receipt, since they use the rooms for amorous adventures. Since the rooms typically rent by the hour and there are next to no records of the number of occupants, odds are that the motels are grossly under reporting their revenues and under paying their taxes.
I think brothels (which many of these motels really are) as well as motels ought to be taxed fairly, and I certainly favor helping the extreme poor, but apart from the question of whether government programs effectively help the extreme poor (maybe sometimes, but probably not usually), there is the question of who will be paying the additional tax to help the extreme poor.
My fear is that the poor themselves will pay the higher tax. Sure, a few middle class clients avail themselves of these motels while a few pimps are raking in the dough, but in general the motels are used by the lower-earning prostitutes and their similarly financially-strapped clients. Not many affluent philanderers could stomach the grime of these motels, after all.
Anyway, it doesn’t make a lot of sense to me to tax the poor to help the extreme poor, especially since a good portion of the additional tax revenues will just be siphoned off by the government bureaucrats hired to conceive and administer the anti-poverty programs.
I like the tax proposal from the standpoint of fairness–right now there is way too much tax cheating going on–but don’t like it as a way to increase tax revenues. I think it should pass at a low enough tax rate to be revenue neutral, since taxing the poor to enable the government to have more programs to assist the extreme poor makes no sense to me.