Costa Rica Expertise LLC

Norwegian artist Edvard Munch could have been thinking of bureaucracy as inspiration for his famous 1893 painting "Scream."

By Garland M. Baker
Special to A.M. Costa Rica

What is Tributación Directa doing? One does not know whether to get drunk, curse or cry.

Tributación Directa is the tax collecting agency.

Last year, taking company books to be legalized was a long process in San José. A registrant had to fill out a form, play musical chairs, and then leave the five or six books for over a month.

In February, the tax department decided to become efficient. The first thing officials did was make a new rule that made all unused, printed legal books currently in existence obsolete. They wanted the first page of any book they legalized to have a special form imprinted on it.

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Thousands upon thousands of legal books printed over the years that were sitting in warehouses all over Costa Rica instantly became nothing more than trash. This fact meant thousands of trees had been chopped down and made into paper for use in these books needlessly. Complaints to the workers at Tributación Directa met with blank faces. It was their way or no way — meaning they would not certify any books without the form. Registration and certification of books is required in Costa Rica for any company. One reason is to avoid fraud.

Tributación won the battle. Everyone had to rush to buy the new books with the preprinted form. Printers took a hit.

Last week Tributación had a new surprise — a new effort at efficiency. Tributación Directa employees told an accountant getting books legalized they will no longer legalize accounting books for inactive companies. Only a few books in each company set will have firm identification stamped in them.

Tributación workers state it is a waste of time because inactive companies are not in business to make money.

This author believes Tributación Directa needs a little help. Here is a short note to them:

Tributación,

To clue you in, most property transactions in Costa Rica are done though these inactive companies amounting to billions upon billions of dollars every year. Furthermore, almost every attorney understates the value of the transactions to save their clients money on the property transfer taxes while at the same time they line their pockets with full fees on the same transactions. Look around you. The attorneys are driving fancy — and expensive — new cars and you do not have the money for new computers.

Tributación, this means you are not getting the taxes that are legally due the country.

By not requiring legalized books for inactive companies, you are just helping the tax evaders to evade taxes.

By the way, your own normative No. 2, printed in your tax bulletin of September 2004 states that when people request a full set of legalized books, you are required to legalize them.

Your normative states the extra work it entails is no excuse not to legalize all books upon request.

New laws to curb the rampant property fraud in Costa Rica end in legislative bog and mire.

New tax laws and enforcement are in the works, but the legislation is moving like a turtle through the legislature. Why? Perhaps there are too many pressures to maintain the old, faulty traditions.

Garland M. Baker has been a resident of Costa Rica since 1972 and is now a naturalized citizen. He provides multidisciplinary professional services to the international community. Reach him at [email protected] Baker has undertaken the research leading to these series of articles in conjunction with A.M. Costa Rica. Copyright 2007, use without permission prohibited.

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