Proposals for new taxes failing to keep up with deficit surge

The government doubts that it can get new taxes passed in this legislative session.

In the meantime, the expected government deficit appears to be growing larger than the 3.5 percent of gross internal product that is being suggested as a target for new taxes.

The current administration and Edgar Ayales, the minister of Hacienda, have stepped away from proposals after more than 60 meetings of technical staffers over the possibilities of new taxes. They face strong public opposition in an election year.

Instead, the ministry is holding roundtable discussions on technical topics with whoever comes. The first one was Thursday morning.

In an analysis of the government proposals, the Instituto Nacional de Seguros said that the plan is to cut expenses and reach the 3.5 percent target for five years. However, the state insurance company, in its periodic reports on the finances of the country, said that the Banco Central sees the budget deficit at 5 percent of gross internal product by the end of the year, but there is a chance it might be greater.

Officials discuss tax evasion and tax exonerations today. The agenda basically was strengthening the administration of the tax and customs agency.

Government agencies are beginning to float favorable comments on a value-added tax, which has been proposed continuously by the Laura Chinchilla administration.  That is a tax at every stage of the production process that tends to prevent evasion. Several Latin countries have such a tax, as do many European nations. Such levies raise much more money for government than a straight sales tax.

Some in the United States favor such a tax. Anni Podimata, a political leader from Greece and vice president of the European Parliament will speak at a special briefing for U.S. Congress members  next Wednesday, as activists from across the U.S. gather in Washington to urge Congress to shift the federal budget debate on how much more to cut in spending, and instead increase federal revenues with a tax on Wall Street trades.

Ms. Podimata is a leading advocate of a financial transaction tax, now being implemented in 11 European Union countries.

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