Lince GonzálezLuis Sandoval

Costa Rica in the finals three decades haschanged . The followings aspects can show why.Poverty is at the 21%The Ginny coefficient rose form 0.421 to 0.437 to

be a high index of inequality. (the GinnyCoefficient is one way to show the inequality ofone country)

The middle class sector has declined.Unemployment; 7,7%Deficit of more than 5% of PIB and will

continue to riseLooking at this data

Why we need this tax reform?

Goods andservices

Debt.

Othercommonspending

The Act aims to collect more sales taxes,generating new income. With this new income thegovernment plans to overcome the fiscal deficitwitch is 5%.of the PIBHowever, the effects of this law depend the

majority of rates imposed by the Central Bank

Costa Rica is known to require atax reform to generate the resourcesneeded for the various activities ofsociety. For example, for each colon ofbudget in the legislative assembly ,they spent 1.83 in other words, they spendnear of the double of her budget.

Déficit primario (ingresos menos gastos sin intereses)Déficit primario (ingresos menos gastos sin intereses)

Companies like ICE, CNFL, AYA, RECOPE,among others, they will not be affected by theincome taxes, because they pay little by conceptof ISR (income taxes).According to the reform, the project will protect

about 20% of the nutritional basket, because theproject try to protect the people of low-income.

Who receive a smaller wage of ¢ 685,000, 00monthly ones WOULD NOT PAY TAX on thatwage. Who win more that four millions or morewill pay one tax of 20%. Now, they pay only a15% of the money then of 4 millions. Whathappens if somebody win more that 685,000.00but less than 4,000,000.00 ? The people with thiswage will continue with the same tariff.

Organic agriculture would not pay taxesThe cars with a value greater than 18 million will

pay 50% of more taxes. Public transport not willpay.On other hand the bank transaction will not affected.

Only the commission that get the bank will pay taxes. For example the bank get some commission for theuse of the teller. The 14% of the commission willpay taxes. The bank will pay NOT you

Estimated trajectories of the level of the IPC,there exchange rates and difference.

2010 2011 2012 2013 2014 2015 2016

WithoutReform

143,1 151,2 159.9 169,1 182,7 200,4 222,2

WithReform

143,1 156,3 162.5 167,4 172,4 177,6 182,9

Differ. 0,0 3,3 1,6 -1,0 -5,6 -11,4 -17,7

Index of prices of the consumer (IPC)

On order with the studies:Consumer price index would rise from 5.8% to

11% annually (the price of the food and otherthings will increase more than expected)On other hand the studies show that if the

project is approved the prices can be adjusted upto 4,2%.

On other hand, if think in the option of wait thatthe economy increase is a bad idea because theworld landscape is not clear. Also thegovernment only can reduce her cost in one 9%more..The government only has money to pay the

interests of its debts and little by little it will losethe capacity to cover the needs with the town ifthe fiscal plan is not implemented.

Like you can see in the final image, the public debt willincrease if the government not pay the debt and theunique two forms to pay the deb is that the world haveone big increase and this option is not of confidence orthat the government approve the project of tax reform.We know that the idea of more taxes have not a good

acceptance but is the better option for try to overcome ourfiscal deficit and the external debt.We showed the problems that can generate if the project

is not approve but the next is the list of general problems.

Increase in the price of the basic basketIncrease interest in the generals debtThe government will los powerThe government will lose the capacity to do

works of social goods (scholarships, build homeand others)The poor people will suffer more because they

have not the capacity for overcome the problemsand this factor can increase the violence andcriminality.