The Secretary General of the Organization for Economic Cooperation and Development (OECD), Ángel Gurría, congratulated the Costa Rican authorities for the approval of the Law on Strengthening Public Finances (Law 9635).
This law reforms the current sales and rent taxes, creates a tax amnesty, limits some salary privileges and establishes a fiscal rule.
With 34 votes in favor and the majority support of 3 legislative fractions, the tax reform was approved in the second reading last Monday, after several years of failed attempts. A day later it began to rule after its publication in the official newspaper La Gaceta.
The Law of Strengthening Public Finances contains very positive measures for the restoration of fiscal balance in Costa Rica and will allow to stop the growth of public debt as a percentage of GDP in the near future,”
added Gurría.
According to the leader of the OECD, without this reform the relation of the debt and the Gross Domestic Product would continue to grow in an uncontrollable manner and would put at risk the sustainability of public finances.
Its implementation in 2019, and in particular the application of the fiscal rule, will be key for the future of the country. Additionally, the approval of this reform will allow Costa Rica to move forward in its process to join the Organization. In this sense, the Law also reflects the commitment to address broader public governance issues,”
concluded the Secretary.