Expats can bet that stage is being set for push for more taxes

Expats can expect a strong push for new taxes before the end of the year.

The Ministerio de Hacienda is working on some new proposals, and most of the viable presidential candidates have come out for more taxes. Politicians are floating a few balloons, as are appointees.

Alicia Fournier Vargas, a legislative deputy, said Monday that there is a need for fiscal reform. She said the government must ask the citizens for more resources for priority programs and to benefit those who have little. She said that the country’s financial problem was so big that the Ministerio de Hacienda could not handle it and changes in the laws are needed.

The lawmaker was speaking after Marta Acosta, the Contralora de la República, spoke to the Comisión Permanente de Asuntos Hacendarios., the legislature’s financial committee, said the financial situation puts at risk projects that future administrations may propose.

The financial situation is not sustainable and that it requires methods of high impact because fiances already committed cannot assure supporting future programs, Ms. Acosta said.

Costa Rica has the highest budget deficit of any country in Latin America, Ms.  Fournier noted. That statement is backed up by the Central American Institute for Fiscal Studies, which said that the Costa Rican state consumed 26 percent of the gross domestic product.

Nearly half of the national budget is borrowed money.

As A.M. Costa Rica has pointed out, many taxes are designed to specific purposes. Consequently the central government has less flexibility with income.

There have been a round of tax increases in the last few years, including a tax on luxury homes and an annual tax on corporations.

President Laura Chinchilla tried to win passage of a package of taxes, but the Sala IV constitutional court sidetracked the effort. Instead there have been smaller proposals that have passed the legislature, and more are expected to be presented.

Meanwhile, The Dirección General de Tributación, the tax collector, is trying many methods to catch evaders. Recently that agency handed out 50 million colons in prizes to those who pay bills with credit cards. The idea is to match up the credit card expenses with reported income to catch evaders.

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