In November 2017, the Costa Rican government presented a tax reform bill to the National Assembly. The deputies have been analyzing it for almost a year. The main areas of discussion are the increasing of income tax, the use of financial intermediaries as tax withholders and the replacement of the Sales Tax by the Value Added Tax (VAT). The bill would be voted on Friday, October 5th, in the first of two votes that it has to undergo to become law.
Between Monday, October 1st and Thursday, October 4th, the deputies passed new amendments to the bill’s content in the National Assembly. They established the tax exemption for the Free Zone Regime; they freed the sale, commercialization and slaughter of live animals from taxes; they agreed on incentives for public employment after performance evaluation; and they prohibited the reduction of salaries for public servants active at the time of the enactment of this bill, among other changes.
The content, which will probably be voted on Friday, October 5th in the afternoon, is still open to new amendments. As a consequence of this bill, the country’s unions have been on strike for four weeks. However, the National Assembly’s members parties agreed to advance in the debate of the bill considered essential to reduce the fiscal deficit.