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Reducing extreme poverty will depend on tax revenue: President Solis

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President Luis Guillermo Solís / Archive (Photo: Casa Presidencial)

President Luis Guillermo Solís / Archive (Photo: Casa Presidencial)

November 19th, 2014 (InsideCostaRica.com) The government’s promise to cut in half the number of households living in extreme poverty will depend upon improved tax collection and tax reforms next year, President Solis told reporters after the opening ceremony of a conference of regional leaders to discuss open government initiatives yesterday.

 

Solis promised to reduce by half the number of people living in extreme poverty as part of his presentation of his government’s National Development Plan on Monday evening.

 

According to official data, 6.7% of Costa Rican households comprising some 345,000 people currently live in extreme poverty.

 

The Solis government is betting on a proposed switch to a Value-Added-Tax (VAT) system from the current sales tax system on goods and services.  The Treasury estimates that changing to the VAT system would raise about ¢280 billion (~$528 million USD) in the first year alone.

 

The Solis government is also pushing a number of initiatives to reduce tax evasion and tax fraud.

 

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  • Ken Morris

    I think this story may be a little misleading. No doubt Solís does believe that a VAT and better tax collection are crucial ingredients for the country’s economic development, and thus for reducing extreme poverty, but I seriously doubt that his plan for reducing poverty is premised upon simply increasing taxes and giving the money to the poor, as this article implies.

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