The legislative committee that will dictate the bill of the Law for Strengthening Public Finances started this week with about twenty motions proposed by legislators. This bill is the main bastion of the tax reform, since it incorporates reforms to current income and sales taxes, to achieve an increase that helps alleviate the growing fiscal deficit.
During the session, Ottón Solís defended a motion to bring the new Value Added Tax (VAT) to 16%, a request that was rejected. His argument was that the proposed reforms are not enough to eliminate the gap between expenditures and revenues.
The difficulty lies in approving a fiscal reform in Costa Rica and it will not be enough. With a VAT of 16% we could reduce the deficit by 2.65% of the GDP and nearly 0.5% in spending. In one year, the primary deficit would be reduced,”
Otto Guevara, who criticized the behavior of the government of President Luis Guillermo Solís in terms of spending, was the main opponent of this motion.
Regarding free trade zones, Solís insisted on the possibility of withdrawing some exemptions for companies of this regime, a proposal that was agreed upon by Edgardo Araya, from Frente Amplio. Despite this, the motion was rejected.
Guevara participated in the allegations against the majority of motions. He believes the project is not necessary.