The Fiscal Plan presented by the Executive Branch, is awaiting the approval of the Legislative Assembly, however, the deputies that oppose it already presented over 1000 motions to block the project.

Deputy Dragus Dalanescu, part of the National Restauration Party (PRN) presented a total of 500 motions against the Project Law to Strengthen Public Finances which proposes, among other measures, going from the current 13% sales tax to a 13% value added tax (VAT) for most services.

The 14 deputies of the National Restauration Party have made it clear they will not support any type of taxation to products of the market basket, health services, education services, medications or rent, their argument is that they are “defending the most vulnerable sectors”.

The fiscal plan bill proposes that private health and education are taxed at a 4% rate, while the purchase of articles for packaging and raw materials, as well as services used for the production of agricultural products, aquaculture and fishing, among others which would be charged only a 2%.

One of the motions presented by PRN deputies, intends to eliminate the VAT Tax on the rent paid by religious organizations, “the payments made by any religious organization, of any creed, corresponding to the rents of establishments or spaces in which the religious activities take place, will be exempt”.

Currently the text of the project law establishes that, when it comes to rent payments by religious organizations, only amounts equivalent or lower than two base salaries (approx. $1,526) will be exempt of pay.

Congressman, Eduardo Newton who is a lawyer and preacher, defended this position stating that “churches do not carry out lucrative activities, but spiritual ones”.

The fiscal plan project expects to reduce the fiscal deficit in close to 2 points of the GNP which is currently at over 6%.

Implementing the VAT means that services that currently don’t pay taxes will now have to pay it, that is the case for instance of gyms and services offered by independent professionals, online services such as Netflix and purchases made online.

The Organization for Economic Cooperation and Development (OECD), has highlighted the importance that the Costa Rican government takes the necessary actions now before reaching a point of economic crisis.