Thursday 25 February 2021

IMF loan must be approved in the Assembly no later than the beginning of June

Despite considering an increase in the Value Added Tax (VAT) rate weeks back, the Minister of Finance stressed on Friday there are no changes to the VAT or property tax, nor will there be a financial transaction tax or privatization of state companies.

QCOSTARICA – The Legislative Assembly must approve the US$1.75 billion dollar “soft” loan from the International Monetary Fund (IMF) no later than the beginning of June, affirms Manuela Goretti, Head of the IMF Mission.

Despite considering an increase in the Value Added Tax (VAT) rate weeks back, the Minister of Finance stressed on Friday there are no changes to the VAT or property tax, nor will there be a financial transaction tax or privatization of state companies. Shuttestock.

At the Friday press conference, Goretti detailed the procedure to follow once the agreement between the IMF technical team and the Carlos Alvarado government was reached today.

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It corresponds to an agreement at a technical level, so the next step will be the approval of the IMF management and executive board, which would be given in March, according to Goretti’s estimates.

Then the loan agreement must go through Costa Rica’s Legislative Assembly.

Gorettin affirms that it is “fundamental” that the agreement successfully complete their legislative process on the basis of a complete package of measures and structural reforms.

“It isessential that all bills successfully complete their legislative process,” Goretting said.

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“It will be very important that everything is done, as agreed,” added the IMF representative.

According to the agreement, the first disbursement would occur days after legislative approval.

Today, what is known is that taxes will be part of the agreement, whether new, by eliminating exonerations or modifying existing ones.

For his part, the Minister of Finance, Elian Villegas, stressed that the agreement does not include any changes to the Value Added Tax (VAT) or property tax. Nor, he continued, did it include the creation of a financial transaction tax, imposing supplementary pensions, or privatization of state companies.

 

 

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