On Tuesday afternoon, Minister of the Presidency Rodolfo Piza admitted that the 2% Value Added (VAT) tax on basic basket products could increase poverty in the country.
Piza admitted this after CRHoy published that, in May, Piza, President Carlos Alvarado, and Frente Amplio legislator José María Villalta, had a meeting where he recognized this possibility.
President Alvarado acknowledged, in a meeting we had, that the VAT on the basic basket could increase poverty by two percentage points. We are talking about more than 17 billion colones a year that would be extracted from the poorest populations,”
said the legislator.
Those statements by Villlata were not denied by Piza; however, the head of the Presidency tried to soften them, given the heated discussion about this tax, and added that Alvarado’s statement was conditional.
According to Piza, the 2% tax on the basic basket would have “limited effects” on the increase in poverty in the country if the government does not take measures in this regard.