Q COSTARICA — The decline in tax revenue reported by the Ministry of Finance in recent months has not gone unnoticed by the International Monetary Fund (IMF), which has proposed a series of stringent measures for Costa Rica.
These measures include applying taxes to the school bonus and the basic food basket, as well as several changes to the income tax currently paid by businesses and individuals.
In its latest report on the country’s situation, released last week, the IMF proposes raising the VAT from 1% to 13% on all products in the basic food basket. This basket primarily includes mass-consumption goods such as rice, milk, beans, sour cream, cheese, oil, and other items considered essential.
Another measure involves applying VAT to the school bonus. This is a bonus received only by public sector employees and, in theory, would generate an increase in tax revenue equivalent to 0.3% of GDP.
Finally, the IMF recommended reducing the minimum income tax exemption amount for salaried workers, while simultaneously increasing taxes on higher earners.
In addition, the IMF recommended that the country introduce a single corporate income tax rate, along with a simplified tax regime for small taxpayers.
What does the government say?
However, the possibility of moving forward with a plan to increase revenue through new taxes was dismissed by legislator Nogui Acosta, former Minister of Finance and head of the ruling Pueblo Soberano party, in an interview with LA REPÚBLICA.
Nevertheless, the politician does agree that Costa Rica should adopt a global income tax system, which would unify all income received by an individual or legal entity during a year and apply a single progressive tax.
Under this system, it doesn’t matter if the money comes from a salary, independent consulting, travel expenses, rent, teaching, or a business; All resources are consolidated into a single base for calculating the tax.
“The position is not to approve any new taxes for four years. Note that global income tax is not more tax. It’s an issue we will evaluate later, but it’s not about creating new taxes in the country,” Acosta said.
The current situation
In terms of tax collection, at the close of the first quarter of the year, total revenues experienced a decrease of 0.2% of 2026 GDP compared to the same period in 2025.
In nominal terms, they reached ¢1.95 billion colones, representing a net cumulative decrease of ¢70,855 million compared to the same period in 2025, when they stood at ¢2.03 billion colones.
Among the factors that have contributed to the slower growth in tax revenues are the lower exchange rate, less dynamic growth observed in some periods under the final tax regime, legislative decisions that have weakened the tax base, and what is known as “tax fatigue,” meaning that the 2018 tax reform has lost its impact.
By the end of last year, the debt-to-GDP ratio stood at 59.2%, and although debt grew by 1.5% as of March 2026 compared to the end of the previous period, it remained below the historical average growth rate for the 2009-2026 period, according to the Ministry of Finance.