Thursday, 1 October 2020

NOT The Way To Go Costa Rica, To Tax Electricity, Water, Rents and Health

If the tax proposal is approved I will have to keep a real close eye on those dials!
If the tax proposal is approved I will have to keep a real close eye on those dials!

TICO BULL – One of the issues made clear by both foreign and national businesses, is that Costa Rica has to cut its electricity rates.

So, while the president on the one hand gives us the impression that he agrees that electricity rates are high and efforts should be made to lower them, his minions are plotting an increase in the way of more taxes.

The Ministry of Finance this week announced a proposal to move from a sales tax on goods, to Value Added Tax on goods and services, that will include taxing electricity consumption of 250 KWH or more.

- paying the bills -

Currently, there are is no sales tax on electricity.

I checked my consumption for the last six months. The CNFL, the national power and light company, is so nice of them to provide a record of consumption for the last six months. My bill tells me I consume an average of 10.5 KWH daily, for a average monthly (30 days) consumption of 315 KWH.

Based on my consumption and the current rates, by the end of this year, my average monthly cost will increase by ¢3.900, ¢4.225 next year and ¢4.530 in 2017 (based on a VAT of 13% for 2015, 14% for 2016 and 15% for 2017).

This is might not seem much, but what about a business that, first pays higher rates than residential and second consumers way more than my 10 daily.

This is reducing electricity costs? It appears to be the same accounting principle of counting job fair jobs announcements as a jobs created.

- paying the bills -

I fear that, if the VAT proposal is accepted as presented, more businesses – both foreign and national – will choose to abandon the country. Or at the very least cut back on their payroll as they trim expenses.

Me, I am going to turn off that ligth bulb that in the hall I keep on all night, just in case I have to get up in the middle of the night. Oh, yeah, off goes the “porton” light. I am going to disconnect my electric garage door opener, I can do it manually. Probably need the exercise anyways.

Out will go the electric stove. I recenlty built an open air BBQ that can I use to cook meats and boil water to make my pasta. Out goes the suicide shower. Cold showers from now on, I will get used to it.

My computer time will be limited, am going to stretch every bit of power out of the battery. Go to the local mall to charge up.

Will have to probably give up my expresso coffee machine, “choreado” will have to do (with water boiled on the BBQ). And will have to limit my television viewing to a select group of shows I really can’t live with. Repeats, click off.

The goal is to keep my consumption to less than 250 KWh monthly (8.3 daily) and thus avoid being taxed.

- paying the bills --

Mr. President, NOT a smart move to tax items as electricity, rents, water and health services over a certain limit, a limit that, well may just be beyond my ability to live within.

"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.

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