Monday, 23 November 2020

“Costa Rica would lose tourism competitiveness due to new requirements”, business sector

A charge of US$15 to tourists who want to enter Costa Rica, as proposed by a bill, would reduce competitiveness to the country as a destination, according to tourism entrepreneurs.

Image from La Republica

“This is not the most opportune moment to try to impose a new burden on tourism, considering that in a few days services will begin to be taxed with the entry into force of VAT (Value Added Tax), which could eventually have an impact on rates,” said Shirley Calvo, executive director of the ámara de Turismo (Chamber of Tourism).

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However, the director cannot negate the benefit of the charge, that would generate funds that would strengthen the National System of Conservation Areas to finance expropriations, conservation and infrastructure of national parks, one of the most visited tourism of attraction of tourists.

“At this moment, the sustainability of these areas is urgent, because they are deteriorated and could affect tourist visitation, which is our main currency,” said Paola Vega, the Partido Accion Cuidadana (PAC) legislator who supports the bill.

Nationals, transporters, cruise passengers, diplomats, people in transit or who have entered in the last 30 days, would be exempt from the charge.

Currently, tourists arriving by air pays US$15 and 5% of the ticket part of the air ticket, money received by the Costarricense de Turismo (ICT) – the Costa Rica tourism board.

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Leaving the country costs US$29 (US$27 airport fee + US$2 bag inspection fee) which is included (for the majority of airlines) in the price of the ticket. Leaving by air costs US$8 (US$5 tax + US$2 bag inspection + US$1 for Senasa).

Solvency requirement. With respect to separate bill proposes upping the ‘solvency requirement’ from the current US$100 to US$500, proponents argue that countries like Panama and the United States already implement such a measure.

The tourism sector is the main generator of foreign exchange in the country, as well as employment.

According to the ICT 2018 figures, direct employment in the tourism industry is 211,000 people and has some 3 million visitors annually.

The consensus of the business sector tourists should not be burdened with the tax proposed, no matter how praiseworthy the intention is to seek resources for the protection of protected parks and wild areas, because it would reduce the country’s competitiveness.

The country is already deemed an expensive destination and with the change to the VAT next month, that will make services more expensive, that will have a trickle-down effect on all prices.

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