Tuesday 15 June 2021

Government Decides To Propose A 13% VAT

But the government does not rule out that the tax be 15%, it depends on the consensus of other parties

The Chief of Staff, Sergio Alfaro and Helio Fallas, Minister of Finance, in a discussion with legislators over the government’s proposal of a 13% value added tax. (Mayela López, La Nacion)

Being more feasible to obtain the 29 votes needed in Congress, the Government decided to propose transforming the current 13% sales tax to a Impuesto Sobre el Valor Agregado (IVA)- Value Added Tax (VAT) – instead of the 15% it had been promoting.

The Vice Ministro de la Presidencia (Deputy Chief of Staff), Luis Paulino Mora, explained the draft bill, Ley de Fortalecimiento de las Finanzas Pública, that the Executive Power will put forth before Legislators.

- Advertisement -

The VAT would include taxing items such as legal fees, streaming television services, rentals and computer services, among others, that are not taxed today under the sales tax policy.

The Government is urging the approval of its proposal as it faces an accelerate deterioration of the State’s finances. 2016 closed with a 5.2% deficit in the Gross Domestic Product (GDP) and the Central Bank (BCCR) estimated this year would increase to 5.9%.

However, after a review last July, the BCCR projection was revised to a 6.1% fiscal deficit for this year and 6.8% for 2018.

Molina said the VAT proposal has the support of legislator of the Liberación Nacional (PLN) and would expect support from the Acción Ciudadana (PAC), the ruling party.

- Advertisement -

Of the six presidential candidates, one of which will form the next government, only three, Antonio Álvarez (PLN), Rodolfo Piza (PUSC) and Edgardo Araya (FA), fully support the government’s proposal.

For his part, PAC candidate, Carlos Alvarado, said he leans more to a 15% VAT tax and would have to analyze the impact of the lower tax would have on tax revenues before giving his support.

The Libertarian Otto Guevara is not in favor of the VAT. The perennial presidential candidate said he is more in favor of selling off government assets, such as the State bank, Banco de Costa Rica and the State insurer, the Instituto Nacional de Seguros (INS) and reduce public spending and reduce bailing out of public entities.

 

 

 

- Advertisement -

 

- Advertisement -

FACT CHECK:
We strive for accuracy in its reports. But if you see something that doesn’t look right, send us an email. The Q reviews and updates its content regularly to ensure it’s accuracy.

Ricohttp://www.theqmedia.com
"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

Related Articles

Finance Minister rules out VAT increase and tax on bank transactions

QCOSTARICA - The Minister of Finance, Elian Villegas, totally ruled out...

Government evaluates increasing VAT by 1% or taxing bank transactions

QCOSTARICA - The Government of Carlos Alvarado is evaluating increasing the...

MOST READ

Nicaragua government assures that detainees violated one of the Ten Commandments

TODAY NICARAGUA – The vice president of Nicaragua and First Lady, Rosario Murillo, assured that those who feel persecuted are for the crimes they...

On Monday the vehicle restriction will change, again

QCOSTARICA - In times of pandemic, things change constantly, especially when it is necessary to tighten the belt to reduce the contagion of covid-19. The...

Today’s Vehicle Restriction: June 8, “ODDS”

Today, Tuesday, June 8, only ODDS can circulate. The measure is countrywide and applied between 5:00 am and 9:00 pm, save for those under the...

Nicaragua’s Foreign Minister absent from the summit of Central American presidents

QCOSTARICA - The Daniel Ortega government sent its ambassador to Costa Rica, Duilio Hernández, as its representative to the summit of Central American presidents...

El Salvador Makes Bitcoin Legal Tender, A World First

Q24N (Reuters) El Salvador has become the first country in the world to adopt bitcoin as legal tender after Congress approved President Nayib Bukele's...

Tourism sector feels in crisis despite increase in international arrivals

QCOSTARICA - Despite the improvement in tourist arrivals reported in May, with more than 72,000 visitors, both the Cámara Nacional de Turismo (Canatur) and...

The “rebound” effect boosted growth in Costa Rica’s economic activity

QCOSTARICA - Costa Rica's economic activity registered in April 2021 a year-on-year growth of 8.8%, a figure affected by a “base” or “rebound” effect,...

Seven out of ten over 58 years have been fully vaccinated against covid-19

QCOSTARICA - The Caja Costarricense de Seguro Social (CCSS) reports that 70.3% of people over 58 years of age, the so-called Group 2 of...

Simple to request certification of vaccines against covid-19 applied in Costa Rica and abroad

QCOSTARICA - The Ministry of Health issued a new guideline on Thursday that establishes the requirements to request the vaccination certificate against covid-19 in...

WANT TO STAY UP TO DATE WITH THE LATEST!

Get our daily newsletter with the latest posts directly in your mailbox. Click on the subscribe and fill out the form. It's that simple!

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.