Business leaders came out with their own proposals Thursday to protect the nation’s economy from speculative investments.
The proposals were in response to those by President Laura Chinchilla, who called the influx of speculative capital an economic weapon of mass destruction.
The proposals Thursday include an exit tax on dollars from 5 to 25 percent and encouraging an effort by the Dirección General de Tributación to tax interest generated here by speculative deposits.
Investors in colons can make from 10 to 12 percent, depending on how they deposit their money. So the rates have attracted millions from First World economies where the rate may be 2 percent or less.
Wednesday the central government said it has been in contact with the Banco Central to discuss methods to reduce capital inflow. A presidential decree would seek to reduce the interest rate. The use of state funds was suggested as a way to reduce the current interest rate.
The issue is of high importance to expats living in Costa Rica because many receive their income from abroad. Many also have large amounts of money in Costa Rica banks.
The proposals Thursday came from the Unión Costarricense de Cámaras y Asociaciones del Sector Empresarial Privado and the Cámara de Exportadores.
The last thing that the business community and exports want is for the Banco Central to remove its support of the dollar. They fear that with large amounts of dollars entering the country the amount of colons they will be able to get for dollars will drop significantly. Most export sales are paid in dollars but the local costs are in colons. The two entities said they want a floor maintained of 500 colons to the dollar.
Jaime Molina, president of the business chamber said the issue was one of preserving jobs here.
The new proposals also call for a reduction of the colon interest rate by the government exerting moral pressure and by establishing a reasonable inflation goal. The entities also called for action by the Ministerio de Hacienda to use government money to reduce the interest rate.
These ideas are similar to those voiced by President Chinchilla Wednesday. Except the president never specifically mentioned a surcharge or a tax on money sent out of the country. The idea was implied, however.
Also proposed was some type of surcharge on money entering the country. That idea is sure to get the notice of expats, because experts say that separating so-called speculative capital from other money is difficult.
Ie the past, the central government has proposed surcharges of financial transactions at automatic tellers, but these did not become law.
The business chamber noted that the proposal of speculative capital and its consequences is not unique to Costa Rica. In fact, many Latin countries are facing the same problems, and some have prohibited the transfer of large amounts of cash abroad.