Finance minister seeking to make a deal on new taxes

The country’s financial minister said Monday that he is trying to make a deal with lawmakers so that the administration’s tax plans are passed.

The minister, Helio Fallas, who also is first vice president, adopted a conciliatory tone in what Casa Presidencial described as an article.

The text was on the presidential Web site.

In it, Fallas, the minster of Hacienda, predicted 4 percent growth for the country this year. But he also noted that a bit more than a third of the national budget was debt service.

What he did not mention is that about half the budget itself is borrowed money.

He said his ministry has increased income and controlled expenses despite what he said was fierce opposition by certain groups opposed to measures against tax fraud introduced in July 2014. The measures still are in the legislature.

He characterized the country’s financial situation as stable in terms of inflation, balance of payments and the dollar exchange rate. Still, he said, the current income is not sufficient to offset the historic deficit that has been generated over the years.

He said that he believes lawmakers of all parties except those of  Movimiento Libertario understand the necessity of the financial measures.

“We urgently require a national agreement that achieves, as we plan, a more progressive system that modernizes the laws, introduces control mechanism and closes doors to evasion and avoidance to recover the financial capacity of the central government and guarantee sustainability in the long run,” he said.

The Luis Guilermo Solís administration is seeking a 15 percent value-added tax and increases in income tax rates as well as increases in penalties for tax fraud and customs fraud.

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