The government’s decision not to establish new liquor taxes within the fiscal plan was based on a strategy to avoid promoting greater contraband in the country.
According to Deputy Minister of Finance, Nogui Acosta, expanding tax collection on these products would have further encouraged the illegal arrival of alcohol, which would have been counterproductive to the interests of the State, and would have caused a damage to importers, local producers and sellers.
It was a strategic decision, we have the second highest taxes on liquors and cigars, and we are having a serious problem because we have hurt the local industry and the traders who are honest: those who do not buy from smugglers lose customers,”
said Acosta.
The official estimated that 40% of the liquor consumed in the country is smuggled, so the country faces a problem with the existing price differences.
We try to stop it but having such a porous border and having a free zone on a par, the differences are abysmal, and if we add an incentive for smuggling, for example a beer worth 700 colones here and 150 colones in the neighboring country, then bringing the beer from abroad has an incentive that would be higher with more taxes,”
said Acosta.
Several legislators, including Jonathan Prendas from Restauracion Nacional and José María Villalta from Frente Amplio , proposed motions to establish additional charges for liquors; however, the motions did not have the backing of the commission that analyzed the issue.