August 5, 2021

Strikers surround Costa Rican Congress during tax reform discussion

Strikers surround Costa Rican Congress during tax reform discussion

Dozens of strikers against a tax reform in Costa Rica keep the Congress surrounded where the deputies began the discussion today on the merits of the initiative.

With slogans of "not a step back" the union strikers have endured the heavy rains that fall today on the whole country and have been located around the Congress in a peaceful way in front of the police guard of the building.

"We are here fighting for the people, we do not want more taxes that come to hit the poorest," Alberto Muñoz, one of the protesters, told Efe.

On the outskirts of the Congress the union strikers and groups of university students await the events of the discussion in the legislative plenary of the controversial tax reform.

"This project has the least strengthening of finances, this file has established processes without the slightest clarity", complained in the Plenary the deputy of the Evangelical Conservative National Restoration Party, Jonathan Prendas.

The leftist of the Frente Amplio Party, José María Villalta, said that the bill had to have been sent to various institutions before starting the substantive discussion.

However, the arguments of the opponents were not attended by the president of Congress, the deputy of the ruling Citizens Action Party, Carolina Hidalgo, who issued a report to start the discussion by the fund.

The deputies could give first vote today or in the first days of next week, depending on the number of legislators who take the floor.

The unions meet on Friday 26 days of strike, since they believe that the reform will affect more the lower and middle classes, and that it treats the rich and the companies with softness, for what they demand that the project be removed from the Congress and negotiate a new text based on union proposals.

According to the Government, 80 percent of what is collected by the tax reform will be paid by the 20 percent of households with higher incomes and businesses, which will cause a reduction in inequality.

The tax reform has as its star point the conversion of the sales tax of 13 percent into one of value added (VAT) of the same rate but that will tax the services and, in a differentiated way, some products that were previously exempt.

It also includes changes in income tax, capital income, global income and measures to reduce public spending, such as the reduction of salary bonuses.

The Government assures that in fresh tax revenue the reform will collect about 1.2 percent of the gross domestic product (GDP), and that of these new revenues, 57 percent will come from income taxes and 43 percent from VAT.

Costa Rica closed 2017 with a fiscal deficit of 6.2 percent of GDP and for 2018 it has projected at least 7.1 percent.


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