October 22nd, 2013 (InsideCostaRica.com) While aware that the proposal of a new tax is unpopular, two presidential candidates – facing a fiscal deficit should they be elected – are already coming out in support of the creation of a new Value-Added Tax (VAT) in Costa Rica.
National Liberation Party (PLN) presidential candidate Johnny Araya and Citizen Action Party (PAC) candidate Luis Guillermo Solis have come out in agreement with the creation of the new tax.
Araya, saying that the fiscal deficit threatens the country, said that he supports the VAT as well as taxes on capital gains as measures to increase government revenues.
Solis, meanwhile, said he supports the creation of the VAT but warns the transition should be gradual.
On the other hand, Frente Amplio (Broad Front) presidential candidate, Jose Maria Villalta, prefers to reform the income tax to encourage better collection of existing taxes, and to more severely punish tax evaders.
A paper released on October 17th by Finance Minister Edgar Ayales proposed a series of new taxes, including the creation of a VAT, as well as new taxes on private healthcare and private education, amongst other proposals, to reign in the government’s fiscal deficit.