No menu items!

COSTA RICA'S LEADING ENGLISH LANGUAGE NEWSPAPER

HomeNewsCosta RicaPresident of Legislative Assembly doesn't see viability of Costa Rica's IMF proposal

President of Legislative Assembly doesn’t see viability of Costa Rica’s IMF proposal

The president of Costa Rica’s Legislative Assembly expressed his displeasure with the Presidency’s fiscal measures that are intended to help the country secure financing from the International Monetary Fund (IMF).

“I don’t see an atmosphere in the Legislative Assembly to approve more taxes,” deputy Eduardo Cruickshank said in a video shared to his social media pages. “The government has a very difficult task to manage for these taxes to pass.

“I honestly don’t see its viability.”

The Costa Rican Presidency last week announced the fiscal measures it hopes to present to the IMF as part of negotiations to secure $1.75 billion in financing.

Among them are a 0.3% fee on banking transactions, higher income taxes for Costa Rica’s top earners, and a 0.5 percentage points increase on real estate property taxes.

When a country borrows through the IMF’s Extended Fund Facility (EFF), it “commits to undertake policies to overcome economic and structural problems,” according to the financial entity.

A three-year agreement with the IMF “is our best option,” said Rodrigo Cubero, president of the Central Bank, who joined President Carlos Alvarado in asking for the Legislative Assembly to approve the proposal.

Too many taxes, not enough cost-cutting

Critics of the Presidency’s proposal say it relies too heavily on new taxes rather than on other cost-saving measures.

“The evident imbalance in the nature of the proposed measures, 80% of which is based on taxes and barely 20% on cost cutting, is further aggravated by the absence of proposals for economic reactivation,” read a statement from the National Liberation Party (PLN), which comprises the largest faction of deputies in the Legislative Assembly.

Cruickshank, of the evangelical National Restoration Party, said the government should prioritize battling tax evasion, which he says represents $3.8 billion annually.

At the same time, Cruickshank said, the government should tax sectors that are currently “not paying a single colón” in duties. This includes Costa Rica’s tax-free zone areas, Cruickshank argued.

“The ship is sinking, and if the ship is sinking, we’ll all go down with it,” he said.

According to Casa Presidencial, the Executive Branch’s proposal protects key institutions — such as the Social Security System (CCSS) — without placing undue burden on the middle and lower classes.

President Alvarado said IMF financing is necessary to stabilize Costa Rica’s economy, which has been hard-hit by the coronavirus crisis, and that a long legal battle “would be costly.”

Trending Now

Costa Rica to Launch Electric Air Taxis for Sustainable Travel in Guanacaste

Costa Rica is poised to revolutionize its transportation landscape with the introduction of electric air taxis, offering a sustainable alternative to traditional ground travel...

Costa Rica’s Rare Birds at Risk as Human Activity Threatens Extinction

Costa Rica’s bare-necked umbrellabird, a striking black bird with a red throat pouch and crest, is in trouble. A new study in Nature Ecology...

Costa Rica’s Pride 2025 Closing Event Bans Minors, Sparks Outrage

Costa Rica’s Pride 2025 closing event, set for June 29 at San José’s Plaza de la Democracia, was thrown into controversy when the government...

Costa Rica Maintains Economic Stability Amid Global Tensions

Costa Rica is holding steady economically despite global tensions sparked by conflicts involving Israel, the United States, and Iran, according to Federico Quesada Chaves,...

Why Costa Rica Feels Like a Safe Haven for This Longtime Expat

If someone asked me to sum up why I live in Costa Rica in 5 words or less, my answer could well be: “It...

Costa Rica and U.S. Strengthen Border Scans and Biometric Cooperation

U.S. Secretary of Homeland Security Kristi Noem met Wednesday with Honduran President Xiomara Castro to discuss security and migration, following her offer in Costa...
spot_img
Costa Rica Tours
Costa Rica Coffee Maker Chorreador
Costa Rica Coffee Maker Chorreador
Costa Rica Travel Insurance
Costa Rica Rocking Chait
Costa Rica Travel

Latest News from Costa Rica