The Comptroller General of the Republic of Costa Rica revealed in a study last week that 55% of doctors, accountants, lawyers and engineers paid zero income tax in 2015.

The study analyzed the contribution made by doctors and dentists, lawyers and notaries; engineers and architects; accountants and auditors; computer scientists and veterinarians.

Of the professionals who did pay income taxes, the Comptroller determined that on average, these professionals paid ¢494,048 in taxes last year which is the equivalent to ¢ 41,171 (about $77 per month).

• The Comptroller determined that accountants and auditors paid ¢179,000 in taxes on average in 2015 or ¢15,000 monthly (about $30 per month). 61% of them paid no taxes.
• In the case of doctors and dentists, the tax was canceled Taxation ¢ 666,786 on average or ¢55,500 average per month. (about $104 per month). 46% of them paid no taxes.
• Lawyers reported the highest annual average with ¢826,830, which is ¢68,903 per month (about $129). 43% of them paid no taxes.

The Hacienda (Costa Rica’s tax man) accuses that professionals are evading taxes and lying in their tax returns.

Nah! Really?

So apart from the fact that a huge percentage of the population is not paying any income taxes, on the other side of the coin we have a government that has failed miserably in doing anything to control their out-of-control expenses.

VIP Member may wish to read: Obscene Public Sector Pensions In Costa Rica and Obscene Public Sector Salaries Contribute To Costa Rica’s High Cost Of Living.

1. In the chart above we can see that in 2008 the government received 1.9 and spent 1.9 – Great! No deficit!
2. In 2010 costs exploded to 2.5 while income was at 1.9 therefore the government had to borrow money to pay for their expenses. They also implemented more taxes to ‘balance the deficit’ but still nobody thought of cutting expenses.
3. Today in 2016 expenses have continued to increase – the government receives 2.5 but spends 3.5 – and it continues to stack up debt.

While the government continues to beg for more taxes to save the country, little is being done to collect the income taxes that should be paid now and nobody is doing anything to drastically cut expenses to save the country.

It is clearly unsustainable for someone who earns $25,000 per year to borrow and spend $35,000 per year but it would appear that most governments don’t quite understand this yet, Costa Rica included.

Written by Scott Oliver, author of 1: How To Buy Costa Rica Real Estate Without Losing Your Camisa, 2: Costa Rica’s Guide To Making Money Offshore and 3. ¿Cómo Comprar Bienes Raíces en Costa Rica, Sin Perder Su Camisa?

Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.