Criticism of tax plans picks up steam in legislature

The government’s proposal for a value-added tax will reduce consumption, eliminate jobs and have terrible consequences, a lawmaker told the legislature Thursday.

The lawmaker, Paulina Ramírez Portuguez of the opposition Partido Liberación Nacional, said she had seen some of the government proposals that have been presented to the legislative finance committee.

Her party has doubts about a bill to reduce tax fraud, she said, adding that the penalties were disproportionate and excessive. The tax agency would be the judge of any disputes, leaving taxpayers defenseless, she said. She predicted auctions and frozen facilities if the bill passed.

The bill includes taxes on company dividends, limits deductions of interest and would affect small and medium enterprises that are financed mainly with debt, she said.

The bill does not really pursue those who defraud the state but just seeks more money from those who pay and identify themselves, she added.

Another draft of a government bill seeks more taxes but does not speak of controlling expenses, she told the other lawmakers. She noted that the central government presented a 2015 budget that was 19 percent higher than last year.

The government plans to present a value-added tax that begins at 13 percent and increases to 14 percent in three years.

That tax would be regressive, she said.

Ms. Ramírez basically is laying out the position of her party anticipating the presentation next month of the government’s bill for the value-added tax.

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