QCOSTARICA JOURNAL – As legislators continue their work on “modernizing” the tax on motels that was established 43 years ago, let’s look back at how this tax came to be.
It was in November 1972, in the middle of the last government of Don Pepe (Jose Maria Figueres Ferrer), when three pro-government legislators presented a bill to tax motels, the type of accommodation that was scandalous politically.
The tax, a flat 30% of turn-over (revenue on room rentals) , 43 years ago was proposed by Catholic Church priest Armando Alfaro, then president of the Joint Institute for Social Aid (Instituto Mixto de Ayuda Social – IMAS), to finance, at the time, the fight against poverty and contain “binge drinking, sex and drugs”.
The irony to Alfaro’s proposal is that today the IMAS is one of the major retailers of alcohol in the country, operating the duty-free stores at the country’s airports.
The flat rate tax didn’t work out so well for the government and IMAS coffers, thanks to the wiles of motel operators who were able to hide their revenues, in part or full, from … continue reading