On August 1st, the President of the Republic issued a message cataloged as urgent.
I have an obligation to inform you once again – but this time in a peremptory manner- about the reality that hits our economy,”
said Solís on television and social networks.
In summary, the message was: “The Government faces liquidity difficulties,” that is, difficulties in fulfilling its financial obligations as a country administrator.
There is still a gap that we must close with fresh resources,”
added Solís.
These fresh resources are new taxes. This list also includes the fight against evasion and tax avoidance. The first of these terms refers to illegal actions to avoid paying taxes. The second, to seek gaps in the law that allows taxpayers not to pay the liabilities.
How will the Government deal with the difficulties?
Solis announced 6 measures:
• He proposed approving the reforms of Value Added Tax (VAT) and Income . If you vote positive, more services (hairdressers and lawyers, for example) would pay these taxes, as the coverage is expanded. In addition, VAT (currently called Sales Tax) would increase from 13% to 15%.
• The public debt, wages and pensions of the Central Government and transfers with social urgency will be priority when paying , “and then the rest of obligations.”
• By 2018 the Executive Power will propose “zero growth” in the money for the institutions’ annual budget. Legislators will have to approve it.
• They will not enact budgetary changes that imply disbursements. Neither will request new estimates of cost to buy or rent properties.
• It seeks to attract financing among foreign investors, leaving behind the effect of foreigners that invest in the country for a short time, to take advantage of interest rates in colones.
• Extending the period in which an activity of public interest is declared, implying fiscal exemption.