Q COSTA RICA — Costa Rican President Laura Fernández announced at her weekly press conference on Wednesday a comprehensive plan to combat smuggling and tax evasion, which will be officially presented on July 22.
The initiative, developed in conjunction with the Ministerio de Hacienda (Ministry of Finance), seeks to strengthen tax collection without creating new taxes, focusing on tackling evasion, tightening controls and penalties, and closing legal loopholes that allow illicit trade and the underreporting of income.
During her remarks, Fernández emphasized: “This government’s priority is to increase tax revenue by pursuing evasion and illicit trade, not by creating new taxes.”
According to the president, the objective is “to go after those who are evading taxes,” an instruction she reiterated to the economic team. The Deputy Minister of Finance, Víctor Carvajal, confirmed that the plan “responds to the instruction to combat tax evasion and improve control mechanisms, without resorting to new taxes.”
Furthermore, one of the plan’s key elements is the reform of the Ley General de Aduanas (General Customs Law), which seeks to strengthen control over goods entering and leaving the country, especially in containers and retail imports.
Therefore, the president stated that the Ministry of Finance is preparing a proposal to amend the General Customs Law (No. 7557) to strengthen controls on goods entering or leaving the country in containers and on retail imports made by some merchants.
Read more: Stricter controls on customs declarations aim to curb smuggling and tax evasion
Controlling Digital Tax Evasion and the Informal Trade
The plan detailed today by Fernández includes actions against digital businesses that use methods to evade taxes. Authorities have detected online stores that declare products with lower values or in different categories to pay less tax and then sell the merchandise through digital channels.
Furthermore, at the press conference, President Fernández announced that the government is making progress in cross-referencing information to identify merchants who receive payments via Sinpe Móvil and credit/debit cards but do not declare this income to the Treasury.
“This mechanism is used to evade both Impuesto al Valor Agregado (IVA)—Value Added Tax and Income Tax,” she stated.
The strategy includes inter-institutional collaboration and technology to track transactions that currently escape tax control.
Given this situation, the Executive Branch will send draft bills to the Legislative Assembly in July as part of the legal and administrative offensive against smuggling and tax evasion. Some of the initiatives are already underway through public consultations or administrative adjustments, while the complete package will be announced on July 22.
According to the Presidency, the Policía de Control Fiscal (PCD) — Fiscal Control Police, recently seized nearly 24 million contraband cigarettes, the largest blow to this crime in the country’s history.
President Fernández emphasized that “the fight against smuggling and tax evasion is a duty to all Costa Ricans” and called for efficiency and rigor in the administration of public resources.
The importance of the comprehensive plan against smuggling and tax evasion lies in its potential to strengthen Costa Rica’s public finances without resorting to tax increases, thus responding to a societal demand for fiscal equity.
This approach allows the State to recover essential resources to finance services such as health, education, and security, while simultaneously combating criminal organizations dedicated to illicit trade.
Furthermore, the modernization of controls and digital oversight represents progress in transparency and institutional efficiency, which contributes to building trust among citizens and the productive sectors.