Economy faces downturn due to lack of tax reform

July 24, 2018

The Central Bank of Costa Rica (BCCR) warned Monday that the economy will face a growing public deficit and stunted growth if Congress doesn’t pass tax reform.

According to the BCCR, the deficit risks growing to 7.2 percent this year, up from 6.2 percent in 2017.

Economic growth could also see a decline to 3.2 percent from the projected 3.6 percent.

The BCCR said evidence suggests that the longer it takes to pass tax reform, the more of an adjustment will need to be made. That will lead to a higher cost to society. The country’s debt also risks going from 54 percent of GDP to 58.4 percent by 2019 if there’s no tax reform.

The last four administrations have unsuccessfully tried to pass tax reform packages that included new taxes and plans to reign in public spending.

Now Carlos Alvarado’s administration is taking its shot. Congress is currently debating the tax reform proposal put forward by his government.

You may be interested

This week in the Peace Corps: Building sustainable recycling projects
Changemakers
113 views
Changemakers
113 views

This week in the Peace Corps: Building sustainable recycling projects

The Tico Times - August 13, 2018

From the Caribbean to the Pacific, Peace Corps Volunteers (PCVs) work with local communities on environmental awareness, trash collection systems,…

We want them alive: Costa Rica’s reckoning
#MeToo
160 views
#MeToo
160 views

We want them alive: Costa Rica’s reckoning

Katherine Stanley - August 13, 2018

I can’t stop thinking about them. María and Arancha. Arancha and María. They were murdered in a country I love. They were…

Facing terrorism charges and death threats, thousands of Nicaraguans flee to Costa Rica
Latin America
294 views
Latin America
294 views

Facing terrorism charges and death threats, thousands of Nicaraguans flee to Costa Rica

AFP / Marco Sibaja - August 12, 2018

RÍO SAN JUAN, Nicaragua—On a rainy morning in Nicaragua's south, two men step out of the jungle and into a…