Lawmaker says nightclubs and hourly motels can fight poverty, wants to simplify tax

March 11^th, 2013 (InsideCostaRica.com) Motel rooms, three-hour “love shacks” and nightclubs can be a source of income to fight poverty in Costa Rica, according to lawmaker Annie Saborio.  As such, she has introduced a bill that seeks to simplify the tax on such businesses, which is currently set at 30%.

 

The Institute for Social Assistance (IMAS) has not had much luck collecting and making use of the tax charged for each use of a room for a “time-bound intimate gathering.”

 

The only way to improve the situation, according to the lawmaker, is to change the way in such establishments are taxed, as Saborio suggests in her bill.  The bill would change the current taxation to be based on the number of rooms, rather than on each use of a room.

 

The amount would be a percentage of base salary (current 379,400 colones) according to the number of rooms in a “temporary accommodation facility.”

 

The lawmaker had previous presented a bill to force such establishments to install a device that would control the access and keep track of the use of each room in order to enforce tax compliance.  That bill is held up in the Assembly.

 

The aim of the new bill is to raise 300 million colones (about $600,000) to go directly to programs fighting poverty.

 

The IMAS is currently trying to recover more than 1.1 billion colones (about $2.2 million) in unpaid taxes from such establishments.

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