Costa Rica's New President Wants to Tax Online Casinos

Published Saturday, May 08, 2010 -

Costa Rica is commonly known as the 'Switzerland of Central America' with it's peaceful political outlook and tax free status for industries such as online gambling. May 8, 2010 marks an event in the history of Costa Rican politics like no other. The country has elected it's first female President. Succeeding Oscar Arias Sanchez, 51 year old Laura Chinchilla Miranda won with 46.76% of the vote in the recent election. Chinchilla has been elected on a platform that promises to fight the rise of violent crime in Costa Rica along with putting more young people in classrooms in order to stem the migration of talent from the country. In order to make these promises a reality more revenues through taxation have been proposed and the online gambling industry may be on the target list to obtain those funds. Online gambling operators have had a good ride in the free trade conditions of Costa Rica. According to the Economist the government collects just 14.8% of national income in taxes, and its deficit is 4% of GDP. Mrs Chinchilla says she hopes to increase revenues by taxing casinos and online gambling, which her officials hope would bring in an extra 1% of GDP. More radical financial reforms will be postponed a few years in order for the economy to regain strength. The massive online gambling industry in Costa Rica was established about fifteen years ago with successive governments over that time proposing taxation with little consequence or success to date. The fly in the ointment with Chinchilla's plan to govern will be reliant on a pact with the right-wing Libertarian Movement, whose leader, Otto Guevara, won 21% of the vote. “The door to negotiation has opened,” says Mr Guevara. In return for supporting the Chinchilla government, he demands tougher sentences for petty criminals and the publication on the internet of the names of those who receive state benefits. Guevara vows to veto any sort of tax increase so just maybe the online gambling industry there is safe for awhile longer.

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