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Costa Rica: Tax Reforms Integral in Solving Budget Deficits, But 75% Polled Reject the Initiative.

Article Summary:

General rejection of tax reforms in Costa Rica continues, as a recent survey shows that of those who said they were informed about the proposed tax, 75% rejected the initiative, 13% support it and the remaining 12% prefer to not to comment.

Photo Credit: Estrategia y Negocios

Original Article Text From Estrategia y Negocios via Google Translate :

Widespread Rejection of Tax Reform in Costa Rica

A survey by the consulting firm Unimer showed that three out of four people with knowledge of the plan or tax bill Tax Solidarity rejected the initiative, promoted by the Costa Rican government.

For most people in that range, the approval of the tax reform will help alleviate the crisis of the state, according to the study, by request of the newspaper La Nacion.

The sample comprised 200 thousand citizens of the country, of which only 794 showed some knowledge of the fiscal plan.

Of those who said they were informed about the proposed tax, 75% rejected the initiative, 13% support it and the remaining 12% prefer to silence their inclination.
Unimer found that the tax plan gets more support among people with higher incomes than among low and middle income.

The government insists that reform is needed to counteract the hole in public finances, while others suggest strengthening controls and the attack on corruption before passing a law that only reducing poverty in the country.

The proposal envisages transforming the sales tax on a tax on value added tax (VAT) and increase the rate of 13 to 14%.

Also exempt from payment services taxed in the country, such as lawyers and engineers, but by private education and health will be paid only a two% VAT.

Costa Rica last year accumulated fiscal deficit equivalent to 4.4% of Gross Domestic Product (GDP) and the government expects 5.5% for 2012.

Against this background, respondents from 4 to January 10 voted to lower spending (50%), improve tax collection (46%), reduce red tape and bureaucracy (33), services (18) and privatize institutions (16).

The least acclaimed by the respondents is to raise taxes (10%), confirming the overwhelming rejection of the initiative promoted by the administration of Laura Chinchilla.

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