Saturday 12 June 2021

Corporations Tax Could Be Revived, But Not Until Spending Cuts Occur Says Opposition

Partido Liberacion Nacional (PLN) legislators Paulina Ramirez.  Photo Gerson Vargas, La Republica
Partido Liberacion Nacional (PLN) legislators Paulina Ramirez. Photo Gerson Vargas, La Republica

(QCOSTARICA) Reviving the tax on corporations is a goal by President Luis Guillermo Solis, says La Republica, who confirms that the President wants to send a bill to the Legislative Assembly.

The government wants to use the money (revenue), an estimated ¢50 billion colones, to improve public security and expand the prisons.

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The opposition, however, say the new plan to reintroduce the tax is not viable while government spending is not cut.

The government has been discussing a new tax on corporations since the end of last month (April).

Earlier this year the Constitutional Court declared the corporations tax established by the previous government unconstitutional, however, the 2015 period tax was to be paid.

Due to this situation, delinquencies in the first quarter have increased and revenues have dropped by ¢10 billion colones compared to 2014.

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Despite the Court decision, for the Ministerio de Hacienda (Finance Ministry) the tax is still in force. However, it has not bite, the government not having the authority to fine or even order a dissolution of corporations who do not pay.

“If we want good citizen security we must understand that there must be money for it and this project gives us the much-needed resources. We hope the opposition changes its attitude,” said Nidia Jiménez, PAC legislator.

Given the government has not cut its spending, political parties like the Partido Liberación Nacional (PN), the Movimiento Liberatio (ML) and Partido Unidad Social Cristiana (PUSC) say they will not approve any new taxes.

Without the suport of these parties, it is unlikely the governing party, the PAC, will obtain the required 38 legislative votes required to get approval on the new taxes.

“We can see things in parallel, but no new taxes until the expenses are cut. We have had discussions with Helio Fallas, Minister of Finance (…),” said Paulina Ramirez legislator for the PLN.


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