As part of the negotiations with the IMF, the government raises a new series of taxes, one of the most controversial is the collection of a 0.3% bank transaction tax. This tax does not like the Costa Rican ABC Banking Association, which referred to the proposal as follows.
“The Banks recognize the serious situation that the country is going through and have made great efforts to support the most affected sectors, but it seems to us that this tax, in which financial entities would be collecting. It has negative implications for all our clients, regardless of whether They are people or companies. Furthermore, it would arrive at a very complicated situation, as a result of the crisis generated by Covid19 and the country’s fiscal situation. Mario Gómez, ABC advisor
If the tax were to take place and every bank transaction were applied, it would have a net loss of 0.3% for those who carry it out. That is to say that:
- Withdrawing 10,000 would cost an extra 30 colones
- A salary of 450,000 colones would have an extra cost for the employer of 1,350 colones
- A family or business loan of 50,000,000 would have an extra value of 15,000 colones
Unlike VAT, which has a refundable nature and can be equated in expenses against income, this tax is not imposed on the value but on the transaction regardless of the amount to be transferred or origin. Therefore, each transaction makes the production chain more expensive by 300 colones for every 10,000.
In other words, if a company requires to buy from 5 suppliers inputs for its products such as raw materials, wrapping and labels, each transaction for 10,000 colones would add up to 300 colones of the total final production. Therefore, the production of which cost 50,000 colones net margins will now cost 1,500 colones more.
This idea would motivate users to move away from banking and make more cash payments to reduce costs. Moving away from the bank implies a disincentive to save, the circulation of more capital, an increase in the risks of robberies and delinquency and potentially an increase in the counterfeiting of money among other problems.