The year 2021 is a year of great relevance for Costa Rica as it marks the beginning of a new electoral cycle. During the first half of the year the political parties will decide who will be their presidential candidates that will compete for the presidency in February 2022.

2021 will be a very atypical pre-election year that is framed by the continuation of the pandemic, for which, although an end is in sight, it will not come in the short term; and what seems to be the key year to solve the growing fiscal deficit that has affected the country for more than 10 years. Faced with this political-economic scenario, it is not easy for political parties in Congress to make decisions to solve the complicated fiscal problem, since historically the political risk of supporting reforms carries a high political cost.

With these two topics as the basis for this year, we want to comment on certain issues that we believe may be of interest to your business and that are likely to move forward in the coming months in Congress.

  • Tax Issues: possible new lottery tax, elimination of exemptions, possible tax on cooperatives, increase in tax on luxury homes, equalization of taxes between salaried and independent, global income, among others.
  • Trade Issues: Reform of the General Customs Law and the incorporation of a non-intrusive inspection system. Regarding this second point, there is pressure to implement the project; however, the government has not yet decided on how to implement the system.
  • Labor Issues: possible extension of the term that authorizes the reduction of working hours due to national emergency, possible changes to working hours, changes and new regulations related to teleworking.