Unacceptable Taxes

Although Costa Rica's fiscal reform has already been approved, the IMF proposes raising some taxes as part of an "additional adjustment" to reduce debt and ease financial pressure in the short term.

Friday, March 1, 2019

"... “We are negatively surprised by the simplistic position of the International Monetary Fund that in the absence of money, taxes should be raised, we consider those words unacceptable, because it has been demonstrated in this country that a large part of the deficit is because of the inefficient use of public funds and an issue of state efficiency that does not allow people to become businessmen," said UCCAEP President Gonzalo Delgado."

See "Costa Rica: IMF Recommends Raising Taxes"

From the UCCAEP statement:

February 28, 2019. For the productive sector, represented by the Costa Rican Union of Chambers and Associations of Private Business Sector (UCCAEP), the position that the head of the mission of the International Monetary Fund (IMF), in his visit to the country, of increasing taxes more to reduce the deficit, is unacceptable.

Read full statement (in spanish).

More on this topic

Does Costa Rica Need More Fiscal Measures?

April 2019

For the IMF, the country "may need additional fiscal measures, focused on the short term, to alleviate financing pressures and improve debt dynamics.”

After analyzing the current economic situation in Costa Rica, the directors of the International Monetary Fund (IMF) commended the recent fiscal reform, which is important to restore fiscal sustainability.

IMF on Costa Rica: "Unsustainable Fiscal Imbalance"

December 2016

The favorable conditions in the global economy allowed the country to grow by 4.25% in 2016, and administrative efforts to reduce the fiscal deficit were noted, however they will not prevent the debt /GDP ratio from growing.

From a press release by the IMF:

  • Costa Rica’s economy growing robustly, GDP expected to growth by 4.25% in 2016
  • More needs to be done to stabilize public debt levels
  • Key for government and Congress to reach consensus on VAT and income tax reforms proposals to help address fiscal imbalances

FMI: Central America Outlook

October 2010

Slow recovery tied to a lagging U.S. economy, 3% growth in 2010 due to increased domestic consumption and rising remittances and international trade.

The countries in Central America are recovering gradually, led by a rebound indomestic demand (following its sharpcontraction in 2009), which has partly spilled over into imports.

Fiscal situation worsens in El Salvador

January 2009

The IMF report recommends maintaining fiscal austerity and greater supervision of the financial sector.

Elsalvador.com reports that "the fiscal situation in El Salvador had improved in 2007, but it got worse in 2008 mainly as a consequence of the rise in fuel prices which impacted the public purse because of the subsidies, the IMF explained in results called "Chapter IV Consultations" from November 12, 2008.

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