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Costa Rica's Presidential Frontrunner Vows No New Taxes

by Mike Godfrey, Lowtax.net, Washington
19 February, 2014

The frontrunner in Costa Rica's presidential election, Luis Guillermo Solis, has promised to refrain from raising taxes for two years if he wins a runoff vote on April 06, 2014.

Solis, who represents the left-leaning Citizens' Action Party, emerged as the leader in a 13-candidate election on February 02, taking 31 percent of votes.

The candidate said in an interview that he aims to reduce Costa Rica's budget deficit, which reached around 5.4 percent of gross domestic product last year, by cutting government spending and cracking down on tax evasion. These measures would pave the way for eventual tax hikes.

"The problem is trustworthiness, the lack of legitimacy of the state to ask for money," Solis said, alluding to the corruption scandals that have beset the administration of incumbent president Laura Chinchilla. "If we don't gain that back, we're never going to pass a good, progressive fiscal plan so we're going to focus on that first."

Solis's long-term fiscal reform agenda includes the introduction of a capital gains tax. He aims to lift the government's tax take by 4-5 percentage points, arguing that the current 13 percent sales tax does not generate enough revenue.

He also said he will promote Costa Rica's free-trade zones in order to bring in more multinational companies.


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