On Thursday, during the discussion on the proposed draft Law on Palliative and Related Fiscal Measures sent to Congress by the ruling party, opposition blocs pressed for changes related to the update of the Income Tax. They emphasized the need to cut tax expenditures, such as eliminating the exemption of judges from paying Profits and modifying internal taxes like tobacco. The tax package contains eight sections with changes in Profits, Monotribute, Personal property, money laundering and other reforms.
The government is confident that inflation will slow down in the near future, and they have confirmed that the update of Income Tax will be annual. Despite some legislators requesting a quarterly update, the ruling party plans to adjust it annually based on the Consumer Price Index (CPI). During the meeting, several legislators raised questions and made requests regarding tax reforms. Discussions were held about non-taxable minimums for different categories, annual updates of Profits and elimination of tobacco taxes. The government responded to these inquiries and defended its position on tax updates and expenses.
Changes to Personal Property Tax and Monotax system were also discussed during the debate, including modifications in billing and quota ceilings. The Asset Regularization Regime for money laundering was highlighted, allowing for laundering up to US$ 100,000 without penalty. Overall, these tax reforms aim to create a more equitable tax culture while improving fiscal transparency.
Legislators from various parties such as PRO, UCR and Victory Front raised concerns and made suggestions during the discussion. The Government stressed the need for a different approach that ensures equal rights and obligations for all taxpayers while eliminating tax spending as a way to hide State resource beneficiaries’ identities and promote transparency in budget allocations.
In conclusion, this proposal seeks to be a complementary initiative alongside other laws already under consideration by Congress. With May being targeted as an approval month for both initiatives before sending them forward to be sanctioned by the Senate, it remains to be seen how much support this draft law will receive from lawmakers in Congress.
However one thing is certain: any changes made in this new draft law on palliative measures will have far-reaching implications not only for taxpayers but also for businesses operating within Costa Rica’s economy. It is essential that legislators carefully consider all aspects of this proposal before making any decisions that could impact economic stability or lead to unintended consequences in terms of job creation or investment attraction.
Overall this rewrite aims at providing readers with a clearer understanding of what changes are being proposed through this new draft law while highlighting its potential impact on various sectors within Costa Rica’s economy.
