Tuesday, January 18, 2011

What tax bill would do


By the A.M. Costa Rica staff

Here is a basic outline of the Chinchilla administration tax proposal:

• No income tax increase for those earning 651,000 colons or less a month, about $1,300.

• Passive income like rents and interest would be subjected to a 15 percent tax.

• The current 13 percent sales tax would be replaced by a 14 percent value-added tax. 

• Many now-exempt food products would be included in the new value-added tax

• Medicine would be exempt from the value-added tax

• A 14 percent value-added tax would be assessed on the services of professionals and contract workers, such as lawyers, accountants, physicians and dentists.

• A 14 percent value-added tax would be assessed on private health care.

• The tax would be assessed on utilities like water and electricity.

• Public transportation, buses and taxis, would be exempt from the 14 percent value added tax.

• Registered small- to medium-sized companies would pay from 10 to 25 percent income tax.

• A 3 percent tax would be assessed on the sale of property. That is twice the current rate.

• Tuition to accredited private educational institutions would be taxed at 10 percent. Tuition at unaccredited schools would be taxed at 14 percent.

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