Instead of promoting proposals that affect the economic reactivation and the image of the country as a business destination, as is the case of “Renta Mundial Tax”, President Carlos Alvarado should support other initiatives that do generate investment opportunities and not waste time, according to deputies of the New Republic, National Liberation and Unity political parties. They make the warning several days after the government was inclined to support new taxes, based on the text proposed by Welmer Ramos, a PAC deputy.
The fact that the country is facing a Covid-19 health and economic Pandemic at the same time, would make it counterproductive to promote new taxes, since investment would contract, affecting job creation, so it would be irresponsible, said Carmen Chan, head of the New Republic.
On the other hand, the country lacks a tax infrastructure that allows the identification, monitoring and collection of such taxes, according to Yorleny León, deputy for National Liberation.
Universal income (Renta Mundial) is the one in which taxpayers residing in our country would be taxed, that is, whether they are nationals or not, regardless of whether that income, wealth or profits were generated within the national territory or abroad.
In this way, a Costa Rican in any part of the world, such as the footballer Keylor Navas, would have to pay a tribute in Costa Rica, for what he wins in France as a goalkeeper for Paris Saint-Germain.
To approve any tax, the Alvarado government should have the support of at least 38 legislators, which it would not be able to achieve without the help of Liberation, Unity and New Republic, since together they add more than 30 votes of the 57 available.
“It is an irresponsible, merely ideological proposal that is sold as a solution to the country’s problems, and that in reality is nothing more than populism. Approving the “Renta Mundial” would decrease competitiveness and therefore would mean an impoverishment for Costa Ricans ”, concluded María Inés Solís, deputy of the Unit.
The opposition rejects the possibility of charging new taxes, including this Universal income plan.
Carmen Chan, Head of New Republic: Right now the country is suffering from a health pandemic and an unprecedented economic crisis, which has us on the brink of economic and social bankruptcy. On the other hand, we are just emerging from the approval of an important tax reform, which took place after decades of political discussions, and the reforms that have been made are just beginning to take place, and the changes in the tax administration are being implemented.
In these circumstances, it is unreasonable and even irresponsible to think of a new modification to income taxation, when the country must come out of a serious economic downturn, and an important institutional adaptation, of a tax nature.
Yorleny León, Deputy National Liberation: Costa Rica is not in a position to increase neither the fiscal rates (% of taxes), nor the tax base (which is intended by the Universal income), due to the economic problems it faces, especially in terms of its growth, which already before the crisis was slowing down, and now during the pandemic, it plunged into negative growth, that is, economic contraction.
Although, at some point we could go to apply a Universal income tax, the truth is that today it might not be a good business, from a tax point of view or for the image of the country. On the other hand, the country lacks a tax infrastructure that allows the identification, monitoring and collection of such taxes.
María Inés Solís, Deputy PUSC: It is an irresponsible, merely ideological proposal that is sold as a solution to the country’s problems, and that in reality is nothing more than populism. Approving the Renta Mundial tax would decrease competitiveness and therefore would mean an impoverishment for Costa Ricans.
We must be clear that Costa Rica is an “investment importer” not an “investment exporter” and in this sense this is a very dangerous proposition. We would be driving away investment from our country, something that we cannot afford, much less at this time where this should be a fundamental component to be able to overcome this crisis, which has not only left us with the Coronavirus but also the bad decisions of the Government, and this is one more that adds to the list.