Thursday 1 December 2022

It’s All About Taxes

Paying the bills


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1 December 2022 - At The Banks - BCCR

Paying the bills


QCOSTARICA BLOGS – Like most folks who live here in Paradise, I really will tolerate paying taxes. However, I want to get something in return. Something to make life more livable. More palatable but that is not the case in Pura Vida land.

Almost as interesting as the Spanish language articles in La Naciόn are the comments below that deserve to be read. We have a lot of unhappy Tico campers standing right alongside with Expats yelling “Ya basta” Enough.

I ask who dreams up these draconian tax plans and is there some strategic plan in place to move Costa Rica forward? Let’s face it, we are not close to being a developed country and not even near “developing’ any longer.

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The only thing important in the minds of this government is raising money to pay debt and over blown commitments to public workers, especially in benefits and pension and this comes from many, many sources. The idea of a social democracy made sense, perhaps 50 years ago, but not now. We cannot go on borrowing, then finding new ways to generate national income through both business and personal taxation to pay off the deficiency while providing a robust business economic environment.

Yesterday I asked one of the “young Lions” of Costa Rica who is politically involved but from the outside and not cow towing to the Arias family nor to the dynasty of Figueres. The question was very simple, “….do you see 2015 and 2016 years of strikes and protests?” The answer was a solid nod, “yes.”

“Since there is no impeachment process in CR, should Solis give up his chair?”

Again, the answer was, affirmative but with a caveat, “…who would take over as president, do you Juan even know the name of the two vice presidents, do you know the name of your mayor, assemblyman?”

With shame, I lowered my head bowed out.

How in the world can a very small group of backroom politicos propose a sweeping tax reform absent of economic meaning and without, without direction and most important without the input of those who live here? The entire process is an enigma to foreigners and locals alike. Besides pay down on the external debt, where will the new tax money go?

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The latest, crazy, idea is to modify countability of personal income tax by lowering the bar on who pays. If one should earn 793 colons per month there is no income tax. The new off the wall proposal is…lower that number but collect more taxes from more people although the Ministry of Finance, as might well be expected, has no idea how much or has an idea and cannot tell us.

The most bizarre idea is to tax renters.

“Yup” if you rent a home, apartment or office you might very well pay anywhere from 13% to 15% over the agreed upon rent to a tax collected monthly. How is that supposed to help the number one cash cow, tourism? And we will tax on VAT prostitution, sex motels and anything remotely resembling sex tourism for which Costa Rica is famous. And, it is legal.

Can you imagine asking a lady of night if she charges taxes and she pulls out her credit card calculator? Also, lawyers, doctors, dentists, mechanics are now supposed to only take credit cards to pony up taxes paid in since banks are to withhold 2% of every transaction to be refunded later to the payer….Sure!

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ICE is berating Spanish language newspaper La Naciόn for making public a fraction of government or public salaries and worse plus the hidden benefits. I feel, along with many Ticos that all public institutions should participate with a smile on their collective face the opportunity to make available public salaries and benefits of those taking our tax money in the form of salaries and hidden benefits.

A Social Democracy makes sense in a small country like Costa Rica, but only before corruption, greed and a “do nothing” bureaucracy moves in killing the goose who laid the golden egg.

Here, resulting from income tax, corporate tax, luxury home tax, automobile tax, immigration tax, electricity tax, telecom tax and even water tax has resulted in 3 months to years waiting for an MRI, even more years for non/essential life threatening surgery and always be on guard that your kidney or liver might be sold plus your car will soon be a wreck from the potholes looking a lot like a six person Jacuzzi.

The public roads are terrible the train system worse and to walk the streets at night is a risk only Captain Marvel might take.

The Solís tax plan is not a plan at all but rather it is shooting from the hip and he is way over his head as an academic test at UCR and in my opinion, he is a poor President of our Costa Rica while surrounded by even less qualified ministers and advisors.

We voted for change and we got it!

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Paying the bills
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Juan Sebastian Campos
An expat from the U.S., educator and writer in English and Spanish since 1978 with a doctorate in business administrations (DBA) from the United States and Germany. A feature writer for ABC News, Copley Press and the Tribune Group with emphasis on Central America.

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