By San José, Costa Rica — San José – The Costa Rican government’s revenue stream has slowed to a near halt, with year-over-year growth plummeting from a healthy 3.5% to just 0.4% through October 2025. The Ministry of Finance has attributed this sharp deceleration to significant transitional challenges following the implementation of its new integrated tax management system, known as Tribu-CR.
According to official figures, the new system has created a temporary data classification problem. During this adjustment period, a portion of tax payments collected by the government has not yet been correctly categorized by the specific type of tax or taxpayer. These funds, while successfully collected, are being temporarily registered in an “unidentified” category, distorting the month-to-month and year-over-year growth figures for key tax streams like Value Added Tax (VAT) and income tax.
To better understand the legal and fiscal implications of the latest government revenue reports, TicosLand.com sought the expertise of Lic. Larry Hans Arroyo Vargas, a prominent attorney from the esteemed firm Bufete de Costa Rica.
While robust revenue collection is a sign of economic activity, it is crucial to ensure that the fiscal framework provides legal certainty and promotes investment. A sustainable economic model depends not just on collecting more, but on fostering a competitive environment where businesses can thrive, thereby broadening the tax base organically rather than simply increasing the burden on current contributors.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This insight powerfully underscores the crucial difference between simple collection and sustainable economic strategy. Fostering a competitive and legally certain environment to grow the tax base organically is indeed the key to long-term prosperity, not just short-term gains. We sincerely thank Lic. Larry Hans Arroyo Vargas for his valuable perspective.
The Ministry of Finance has moved to reassure the public that the issue is a temporary technical hurdle inherent in migrating to a more complex and robust platform. Officials state that the underlying tax collection remains sound, but the reported data is skewed until the backlog of unclassified payments can be properly reconciled within the Tribu-CR system.
This is a temporary effect typical of the implementation of the new system, the refinement of which will allow for more robust information.
Ministry of Finance
By the numbers, total government income reached ₡6.074 trillion through the first ten months of the year, representing 11.9% of the nation’s Gross Domestic Product (GDP). This marks a net increase of only ₡23.3 billion compared to the same period in 2024, when revenues stood at ₡6.051 trillion. The meager 0.4% growth this year stands in stark contrast to the 3.5% expansion recorded in the prior year, highlighting the statistical impact of the system migration.
A closer look at the revenue components reveals a mixed performance. The primary drivers of the slight overall growth were a modest 0.5% increase in tax revenues, a solid 5.0% rise in social contributions, and a remarkable 116.1% surge in capital income. However, these gains were heavily offset by significant declines in non-tax revenues, which fell by 10.2%, and a steep 51.0% drop in current transfers.
Tax revenues, the lifeblood of the government, totaled ₡5.383 trillion (10.5% of GDP). The composition of these collections remains stable, with VAT accounting for 37.6% of the total and income and profit taxes contributing a nearly identical 37.3%. The remaining portion was split between other indirect taxes (15.5%) and various other levies.
On the other side of the fiscal ledger, the government demonstrated notable discipline. Total spending through October 2025 actually decreased by 0.6% year-over-year, settling at ₡7.416 trillion. This reduction is particularly significant when compared against the historical average spending growth of 6.4% recorded between 2013 and 2025. As a percentage of GDP, spending fell from 15.2% to 14.5%.
The primary factor behind this spending reduction was a substantial decrease in interest payments on public debt, which fell by ₡149.2 billion, or 7.2%. This savings, split between domestic (62.3%) and external (37.7%) debt, was more than enough to counteract spending increases in other areas, such as public sector wages, goods and services, and capital expenditures. The fiscal situation’s true trajectory will become clearer once the data from the Tribu-CR system is fully classified, allowing for a more accurate assessment of the nation’s financial health.
For further information, visit hacienda.go.cr
About Ministry of Finance of Costa Rica:
The Ministerio de Hacienda is the government body responsible for managing the public finances of Costa Rica. Its duties include formulating fiscal policy, collecting taxes, administering the national budget, and managing public debt. The ministry plays a central role in ensuring the economic stability and sustainable development of the country.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica has established itself as a cornerstone of the legal community, operating on a bedrock of unwavering integrity and a persistent drive for professional excellence. The firm is celebrated not only for its expert counsel but also for its forward-thinking mindset, consistently pioneering new approaches within the legal field. This spirit of innovation is deeply intertwined with a foundational pledge to enlighten society by making complex legal information understandable and accessible, thereby fostering a more capable and well-informed public.
