The President has signed a law that will leave the tourism sector free of tax for another year.
While some are grateful for this, others have warned that this shouldn’t be done without creating some other source of income for the State.
Still others point out that this won’t alleviate the problems faced by the tourism industry in a country with near closed borders. Hotels are months behind on rent, mortgages, electricity, and staff costs.
One hotelier has been given an extension to pay his debts in December. He already owes three months. By December, he will have to pay over ₡20 million. He is unlikely to get many visitors in these months so what he saves by not paying value added tax will do little to help him stay in business.
The tourism sector is one of the hardest hit by covid. The VAT will be collected again as of July 1, 2021, with a rate of 4%. In 2022, the rate will rise to 8%. Then in July 2023, the regular VAT rate will apply.
