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Costa Rica President Pushes New Tax Plan

Article Summary:

President Chinchilla is pushing forward with her goal of tax reform for Costa Rica with new tax legislation. Her proposed legislation would authorize public entities to charge for certain non-essential services and establish fiscal rules to curb spending growth as well as create electronic invoices to ensure tax payments.

Original Article Text From El Financiero via Google Translate :

Chinchilla Push a New Bill with More Tax Concessions to Opposition

On national television, President outlined four steps to reduce deficit, both administrative and legislative.

Create electronic invoices to ensure payment of sales tax, giving a fresh start to the tax exemptions of certain luxury goods and the sale of state property are in the decree that details the actions the president Laura Chinchilla will drive to alleviate the growing fiscal deficit that threatens the country.

Towards costs will also Moras a new bill called ” for the efficient management of public finances “which aims to pass the scythe to the political debt that finances the activities of the parties, and sent to the refrigerator wages, pensions and allowances Boards.

Emergency Plan
The measures were announced today, Wednesday April 18 on television , a week after the draft “Law of solidarity tax” received the last rites by the Sala IV.” This bill would have given resources to the State for an amount close to 1.5% of GDP in the early years. Some consider that these resources must come from spending cuts, not tax reform. But ¢ 340,000 million cut from the national budget would lay off about 24,000 civil servants or not pay 60% interest on public debt, or stop paying 55% of pensions from the national budget, “Chinchilla said in his televised address.

With their backs against the wall, Chinchilla hand now check this package that calculates represent about 0.8% of gross domestic product (GDP) and maintain the shortfall in public finances under 5% of production. You must turn again to the Legislature, because the new bill is half the amount in question. The legislative scenario is complicated for a government that lost political capital bet on a single project and a fraction ruling worn after six months of fruitless work.

Underutilized tool
The use of electronic bill seeks to ensure payment of sales tax, said the President.The electronic document that replaces the paper document and retains its legal force was authorized since 2007 by the Directorate General of Taxation. Five years after use has not become popular even though it saves storage costs and paper companies.Also in an effort to increase revenue, Chinchilla said it will eliminate tax exemptions on certain luxuries, but did not specify which.

The sale of state property is the third measure to increase the income of the Central Government . Although, again, the governor did not elaborate, some institutions and public companies sometimes have land idle or underutilized.Plants of the National Production Council (CNP) eg add 600,000 square meters , and only run at half speed at best.

Via Dolorosa
Alongside these actions, the governor hopes to recruit the support of the legislators themselves and others for a new bill that would strip soque the government spending.

To this makes concessions to some of the fiercest opponents of “solidarity tax” as the Social Christian lawmaker Luis Fishman. the governor’s plan provides for the authorization for the transfer of surpluses and other resources free from the rest of the public sector to the Central Government; idea promoted by the rojiazul.Wages and pensions and allowances luxury Boards would be frozen, and cut the debt policy.

Exemptions to the remittance of profits abroad would be eliminated.The tax on profit remittances abroad is a measure affecting firms in the free zone regime and was one of the items referred to in “solidarity tax” which generated more resistance in the national productive sector.

In addition the new bill would authorize public entities to charge for certain non-essential services and establish fiscal rules to curb spending growth.

Link to Original Article:

From El Financiero

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