According to Finance Minister Helio Fallas, the government’s fiscal deficit reached ¢2.02 trillion (billion), the equivalent of 6.2% of the country’s GDP, by the end of 2017. This figure is the highest since 1994, when the State took on the bankruptcy of Anglo Bank.
Tax revenues for 2017 grew by 5.3%, the lowest figure in the last five years. Fallas explained that this is due to a fall in the collection of sales tax (it grew by just 2.8%), although the growth income tax (10%) is also lower than in 2016.
For the first time in history, revenue collection exceeded that of sales,”
said the minister, who added that the greater growth of the economy in the service sectors and the drop in the import of vehicles had an impact on income from sales tax.
Spending increased to 9.1%. It also increased as a percentage of GDP, representing 20.7% in 2017, the highest since 2009. In this area, the government managed to reduce the growth of salaries, but not interest on debt.
When we arrived at the Government we found a series of structural problems to which we tried to give an answer, in order to make progress,”
said Fallas.
Fallas believes that the implementation of the Virtual Tax Administration (ATV), the Unique Tax Registry (RUT), and the Electronic Invoice have modernized part of the collection.