The new version of the fiscal reform project (Law on Strengthening Public Finances) would generate resources equivalent to 2.4% of GDP. This figure is higher than the previously estimated 1.9%. With the new calculation, 1.4 percentage points would come from new revenues and 1 percentage point from spending cuts.
This was explained by Finance Minister, Helio Fallas, at the last press conference of his administration. According to him, the growth in the estimate comes from spending (half a percentage point more) because a limitation to specific destinations was incorporated to the Tax Rule.
If we take into account that the primary deficit is 3%, with the new text we would be closer,”
said Fallas.
The new text was presented last Thursday to the Legislative Assembly. Fallas insisted that if approved, the country’s indebtedness could be renegotiated with the World Bank and other entities.
Edna Camacho, coordinator of the economic team of the future Government of Carlos Alvarado, was in charge of accompanying Fallas to his last meetings in Washington with international organizations. The minister said he has not yet received any news about who will be his successor, but said he has already worked hand in hand with Camacho.