Costa Rica Should Increase Taxes

The World Bank recommended the country to increase its taxes, because they are insufficient to cover its high level of public spending.

Wednesday, July 8, 2009

The coordinator at the International Development Bank, Ana Lucía Armijos, indicated that Costa Rica uses 17.3% of its gross domestic product to social spending. After Argentina, Brazil, Chile and Uruguay, it is the country that invest the most in this area.

In its web site, Terra publishes: "However, Armijos remarked that fiscal income in 2008 represented 15.7% of Costa Rica's GDP, a similar figure to the rest of the region, like Honduras, whose income was of 15.6%. For Armijos, in comparison to other countries, 'Costa Rica should increase its fiscal income to pay its social services'".

More on this topic

IMF: Time is running out for Costa Rica

March 2016

The institution is once again emphasizing more efficient public spending and making cuts before a fiscal adjustment comes into force, in a form that is "draconian and with emergency measures".

Making cuts and improving efficiency in public spending is once again the main recommendation of the International Monetary Fund.

Costa Rica: Public Spending Up 18%, Revenue 5%

June 2010

In the first five months of 2010, the fiscal deficit was $670 million, 86% more than the same period of 2009.

An article in notes that “the deficit accounted for 1.93% of the country’s production. The Treasury expects the deficit to represent 4.8% of the GDP by the end of the year”.

More Taxes in Guatemala

August 2009

The Government is requesting approval of a new tax package, for financing increased spending by the State.

The editorial in newspaper "El Periódico de Guetemala", recalls campaign promises by President Colom, of not raising taxes. The government is instead pushing for increases, at a time when tax cuts should be done to fight the economic crisis.

IMF wants Honduras to tighten spending

August 2008

A mission from the IMF asked the Honduran government of President Manuel Zelaya to control its spending on salaries for officials and to increase social investment.

The Government of Honduras "should restrict the granting of net loans from the public sector pension fund and try to control salaries, in order to protect its investment and social spending, and to strengthen banking supervision even more," said group demanded in a note.

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