Caribbean & Central America - February 2013 (ISSN 1741-4458)

On 21 January the Chinchilla government unveiled a bill to grant the central bank the power to increase the current 8% tax on foreign investments by a further 30 percentage points. The plan, designed to keep the colón in check since a spike in its value at the end of 2012, could see taxes on the income received by non-residents increase to 38%. Investment funds, currently taxed at 5%, could face a levy of up to 35%. The colón, which had gained the most of all Latin American currencies since the start of 2013, fell on the announcement. The legislation is designed to be temporary.

Inflation: According to Costa Rica’s national statistics institute (INEC), inflation for the month of January 2013 was 1.13%, up 0.17% on the same month the previous year. Inter-annual inflation was 5.75%, the highest in the last four years. The inflation rate for 2012 was 4.55%.