Wednesday 16 June 2021
Home Business Economy Costa Rica got more expensive this morning, July 1

Costa Rica got more expensive this morning, July 1

New rates of the Value Added Tax (VAT)on intems in the basic food basket and construction, among others; and income tax take effect today

(QCOSTARICA) Starting from today, July 1, 2020, articles of the basic basket and agricultural supplies will have a 1% Value Added Tax (VAT), and other changes that apply to some construction and tourism services, and an increase of one percentage point in the income tax for some incomes and surpluses.

In the case of the basic basket, the change applies to 195 products.

Some examples of goods that make up the basic basket are: white rice, beans, fresh liquid milk, some beef, pork and chicken, sausages, tuna in oil, some fruits such as avocado, limes, some vegetables and greens like sweet potatoes, onions, tomatoes, potatoes and chayote, and hygiene items, such as toilet paper. The complete list here.

The calculation of the tax on these basic basket products is complicated, in that in entails tax and credits on producers, their registration, and distributors and marketers, which costs end up passed on to the consumer.

Tourist services tax

- Advertisement -

Another of the charges will be that of tourist services. This does not touch the entire sector as such.

For example, renting a hotel room already has a 13% VAT, so no changes there. But if you hire services such as a tour, canopy, or a horse ride, for example, an 4% valued added tax applies.

VAT on construction services

All construction services had were exempted from paying the VAT must now start paying 4%. This means that any work that is still in process will be susceptible to this new cost, and that will necessarily cause the developer to have to decide whether to lower their profit margin or charge the client more.

Anyone who provides services related to the sector must now pay the 4% value added tax.

- Advertisement -

The argument from the construction sector that the VAT should not apply to them on July 1, as it would make the projects more expensive and generate more unemployment and informality.

However, weeks ago the new finance minister Elián Villegas was emphatic that VAT on construction would be charged, although the government was willing to give up on tourism and the basic basket, which has not yet occurred.

A bill, presented by the government on June 11, to postpone the tax to June 30, 2021, is still under discussion in the Legislative Assembly.


- Advertisement -
"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

Related Articles

“Caso Cochinilla”: Name arose when comparing parasite with hidden corruption

QCOSTARICA - On Monday, the Organismo de Investigacion Judicial (OIJ) moved...

Bribed with cars, sexual favors and money in exchange for road works contracts

QCOSTARICA - The OIJ uncovered a big pothole on Monday when...


Tourism sector feels in crisis despite increase in international arrivals

QCOSTARICA - Despite the improvement in tourist arrivals reported in May, with more than 72,000 visitors, both the Cámara Nacional de Turismo (Canatur) and...

The U.S. and Democracy in Nicaragua

Q REPORTS (Council on Foreign Affairs) Democracy is being destroyed in Nicaragua. This has been the long-term project of Daniel Ortega, the country’s dictator,...

Central America is back in the news for the wrong reasons, Costa Rica is once again the exception

QCOSTARICA - Osta Rica has been the epicenter of regional diplomacy in recent days. The successive visits of the Secretary of State of the...

Europe opens the doors to tourism, these are the requirements

Q TRAVEL - Europe opened the doors to tourism. While worldwide vaccination against covid-19 advances above the levels of each country, the restrictions are...

Costa Rica cannot feel safe from covid-19 before having about 80% of population vaccinated

QCOSTARICA - No doubt, vaccines are one of the most powerful tools to maintain control of Covid-19, but when it comes to entire populations,...

Let's Keep This Going!

To be updated with all the latest news and information about Costa Rica and Latin America.

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.