By Wendy Anders

The Costa Rican Chamber of Restaurants (Cacore, in Spanish) today filed with the Civil and Adminstrative Disputes Court for an injunction against the State Treasury Department (Hacienda). They request that the Treasury Department desist from what they consider to be illegal withholding practices on debit and credit card transactions at establishments with table and/or room service.

Jorge Figueroa, president of the Chamber and a lawyer by training, started smelling something fishy in August 2014 when the Treasury Department initiated income tax withholdings on credit and debit card transactions.

Last year, Treasury expanded the withholdings to include tips and service charges. This affects restaurants and bars who offer table and/or room service, and whose receipts include service charges and tips.

Figueroa, owner of Chancay Restaurant, claims that Hacienda is acting illegally by withholding 7.31 percent of tips and service charges, as this money is part of waitstaff wages and should not be considered business income.

“It is absurd for them to withhold this money. Each month, all restaurants pay sales taxes, and each year we pay income taxes. What’s the big deal? Let us pay each month,” said Figueroa.

“The way it is now, we have to request a reimbursement of withholdings each month, and this takes 30 days. I can’t ask my waitstaff to wait a month to get paid their tips. For a small restaurant doing 10 million colones in sales each month, this comes to about 180,000 colones (about $350),” continued Figueroa by phone today.

The Chamber of Restaurants had 400 members throughout the country. Figueroa told Costa Rica Star News by phone that he has been in dialogue with the Tourism Chamber (Canatur), and the Hotel Chamber who he said will be co-signing the court case.

The Treasury department has received several letters from Cacore over the past year asking for a change in these withholding practices to no avail. The Costa Rican Union of Private Sector Businesses and Chambers of Commerce (UCCAEP) is also supporting the injunction.

The Treasury Department has three days to respond to the suit which was filed today.

If granted the injunction, Figueroa says Cacore will inform its members that any businesses who feel they have suffered financial losses due to the treasury’s withholding practices can file suit.