Friday, 30 October 2020

Poor households will receive about ¢15,000 a year in 2022 for the refund of VAT to the basic food basket

QCOSTARICA – Families in the 20% of poor households (those whose income is not enough to cover basic needs) in the country will each receive about ¢15,000 a year as a refund of the payment of 1% to the Value Added Tax (VAT) starting in 2022.

The basic basket is currently made up of 195 items in a wide variety of products that exempt from sales tax. However, the tax reform of 2018 established a 1% sales tax on some basic basket items.

- Advertisement -

The VAT came into force on July 1, 2019, but exempting the basic basket for the first year and then postponed to the fourth and first year (as of 2022). In the proposal to the International Monetary Fund (IMF), the Government explains that it will make the refund directly.

“The refund will be made directly to the 20% of households (first two deciles) in the country that receive less monthly income. For the selection of households and the transfer of the refund, the National System of Information and Single Registry of Beneficiaries of the State (Sinirube) will be used,” explained the Government in the proposal document to the International Monetary Fund.

The Minister of Finance, Elian Villegas, explained that, based on the surveys carried out by the National Institute of Statistics and Censuses (Inec), the average household spends about ¢1,500,000 colones a year on basic basket good, and 1% of that is ¢15,000 colones.

As of July 2019, there were about 320,000 households that belonged to the 20%. If poverty exceeds 20%, then all poor households would not be covered, although the majority would.

- Advertisement -

The objective of the measure is to subtract the regressivity of the tax, meaning that although the tax is the same for everyone, for people with fewer resources (ie the poor) the amount paid represents a greater part of their income.

 

- Advertisement -
Q Costa Rica
Reports by QCR staff

Related Articles

Poverty in Costa Rica soared to 26%, the highest figure in the last decade

QCOSTARICA - While last year poverty affected around 20% of the...

Staying at home costs 13% more!

On October 1, the 13% Value Added Tax (Impuesto a Valor...

MOST READ

The State spends ¢1 billion a year to look after unclaimed vehicles

QCOSTARICA - What happens when a vehicle is seized by the Policia de Transito (Traffic Police)? In many cases it goes into abandonment if...

COVID-19 in Costa Rica: 1,017 new case for Oct 29; hospitalizations continue dropping

QCOSTARICA - On Thursday, October 29, there 1,017 new cases of COVID-19 reported, of which 269 are by epidemiological link and 748 by testing,...

COVID-19 in Costa Rica: 1,231 new cases for Oct 28, hospitalizations keeps dropping

QCOSTARICA - After a few days of new cases daily under 1000, on Wednesday, October 28, the Ministry of Health reported 1,321 new cases. Costa...

World Bank provides PHP 29 Billion to support households during the pandemic

The Philippines is one of the Asian countries that has been greatly affected by Pandemic. Economists have even estimated the country will lose up...

Recent trend of the R rate in Costa Rica: 0.95 “oscillating”

QCOSTARICA - The R rate of COVID-19 in Costa Rica, estimated with the most recent data of October 28, 2020, is R = 0.95...

Agreement between legislators: marchamo would drop only for vehicles of less than ¢15 million

QCOSTARICA - Legislators from different political parties reached an agreement on Monday, October 26, to reduce the property tax portion of the 2021 Marchamo,...

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.