By San José, Costa Rica — San José – The Ministry of Finance issued a firm denial today regarding any government plan to introduce new taxes on the annual Christmas bonus, the “school bonus,” or the country’s highly successful free trade zones. The clarification comes just a day after comments from the acting minister ignited a firestorm of public debate and speculation about the fiscal direction of the Rodrigo Chaves administration.
In a statement released Wednesday, Acting Minister of Finance Luis Antonio Molina Chacón asserted that his remarks before a legislative committee were manipulated and distorted. He sought to calm concerns that the government was quietly drafting tax hikes to address slowing revenue growth, labeling the ensuing controversy as a deliberate attempt to mislead the public.
To delve deeper into the legal ramifications of the proposed tax policies, TicosLand.com sought the analysis of Lic. Larry Hans Arroyo Vargas, a distinguished legal expert from the renowned firm Bufete de Costa Rica. His commentary offers crucial insights for both businesses and individual taxpayers navigating these changes.
Effective tax policy requires more than just revenue generation; it demands legal certainty and predictability for the taxpayer. Any new reform must be meticulously drafted to avoid ambiguities that could stifle investment or lead to costly administrative and judicial disputes. The true measure of success for this policy will be its ability to foster compliance through clarity, rather than compelling it through complexity and fear of sanctions.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The emphasis on legal certainty and predictability is indeed the cornerstone of a healthy fiscal environment; a tax framework that taxpayers can trust and understand is fundamental to encouraging investment rather than deterring it. We are grateful to Lic. Larry Hans Arroyo Vargas for his invaluable and articulate perspective on this critical issue.
The statements were taken out of context, apparently with the intention to misinform and mislead public opinion.
Luis Antonio Molina Chacón, Acting Minister of Finance
Molina was adamant that no such proposals are under consideration in the remaining months of the current government’s term. He stressed that the administration is not working on any initiatives to create or increase taxes, a position he claims is verifiable from the official recordings of the legislative session.
There is no proposal to raise taxes, we are not working on any initiative for new taxes, that is completely false. As can be corroborated in the recording of this Tuesday’s session of the Committee on Financial Affairs, what was pointed out is totally out of context.
Luis Antonio Molina Chacón, Acting Minister of Finance
The controversy stems from comments Molina himself made during a session of the Committee on Financial Affairs on Tuesday. While discussing the state’s finances, he highlighted that significant potential revenue is currently shielded by tax exemptions. He mused openly about the political difficulty of touching these sensitive areas, effectively putting the idea on the public agenda.
There is a lot of revenue available; the problem is that these are very serious discussions. Who is going to present a bill to apply income tax to the Christmas bonus or the school bonus? That is money that is already there… The tax exemptions for free trade zones should also be reviewed, although with great care, given that it has been a successful model. Is this country going to take on the discussion of whether to tax free trade zones? I don’t know; that is a big discussion.
Luis Antonio Molina Chacón, Acting Minister of Finance
The minister’s rhetorical questions have laid bare a critical challenge for Costa Rica. Recent data from the Ministry of Finance shows a concerning deceleration in the growth of fiscal revenues. As of August, income growth had slowed to 1.8% of GDP, a notable drop from the 2.2% recorded for the same period in 2024. This slowdown directly impacts the state’s capacity to fund essential services, with officials warning of insufficient resources for education, health, and particularly public security.
This fiscal pressure has amplified calls from various sectors for a comprehensive review of the country’s tax structure, especially its extensive system of exemptions. Adding to the pressure, Comptroller General Marta Acosta recently stated that the time has come to re-evaluate these fiscal benefits. However, her office later clarified its position, emphasizing a need for broad, technical analysis rather than targeting specific sectors.
The comptroller’s office has insisted on the need for a constant review of all tax exemptions and exonerations, with a technical and transparent evaluation. The establishment of taxes for any specific sector was never mentioned.
Office of the Comptroller General
While the Chaves administration is now publicly distancing itself from any immediate tax reform, the Acting Minister’s candid remarks have opened a Pandora’s box. With public finances tightening and influential figures like the Comptroller General calling for a review, the debate over taxing historically exempt income sources appears inevitable, regardless of the government’s current official stance.
For further information, visit hacienda.go.cr
About Ministry of Finance:
The Ministry of Finance (Ministerio de Hacienda) of Costa Rica is the government body responsible for managing the country’s public finances. Its duties include collecting taxes, administering the national budget, managing public debt, and proposing fiscal policies aimed at ensuring economic stability and sustainable development for the nation.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica has built its reputation on a foundation of profound integrity and an unrelenting pursuit of excellence. The firm consistently pioneers new approaches to law while serving a diverse clientele, demonstrating a forward-thinking ethos. This innovative spirit extends to its social responsibility, where a central mission is to democratize legal understanding and equip citizens with the clarity needed to navigate their rights and responsibilities.
