OECD Tax Policy Reviews: Costa Rica 2017

image of OECD Tax Policy Reviews: Costa Rica 2017

This report is part of a new series of publications entitled OECD Tax Policy Reviews. These country reviewsare intended to provide independent, comprehensive and comparative assessments of OECD member and non-member countries’ tax systems from a tax policy perspective as well as concrete recommendations for tax policy reform. By benchmarking countries’ tax systems and identifying tailored tax policy reform options, the ultimate objective of the reviews is to enhance the design of existing tax policies and to support the adoption and implementation of tax policy reforms.

This first edition provides a comprehensive tax policy assessment of Costa Rica’s current tax system as well as tax policy reform recommendations. The report is divided into five chapters, starting with a general chapter providing an overview of key macroeconomic and tax revenue trends (Chapter 1), followed by an assessment of the main types of taxes of the Costa Rican tax system, including corporate income taxes (Chapter 2), personal income taxes and social security contributions (Chapter 3), the general sales tax (Chapter 4) and environmentally-related taxes (Chapter 5)

English Also available in: Spanish

Using tax policy to address Costa Rica's domestic environmental challenges

This chapter discusses environmentally related taxes in Costa Rica, and some broader tax provisions that influence environmental outcomes. The chapter discusses how the environmental effectiveness of taxation can be improved while tax revenues can be increased. The chapter analyses the design of the fuel tax and discusses whether its rates could be better aligned with the external costs of fuel use. The sales and import tax exemptions for fuels translate into a de facto preferential treatment of fuels compared to other products. Costa Rica's vehicle taxes are discussed, and the chapter suggests how they could be modified to better align with environmental policy objectives. In addition, the chapter comments on the differential taxation of private and public electricity producers, the recent initiative for a tax on non-reusable plastic containers, and the cost-effectiveness of the country's Payments for Environmental Services Programme.

English Also available in: Spanish


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