Posted by: Idioma Extra | November 21, 2011

Tuesday´s News

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Costa Rica: Government’s Answer Is To Create New Taxes


Taxes are paid by everyone, like it or not. However, in most cases a country’s tax structure is unfair and Costa Rica is no exception. For instance, the 13% Sales Tax represents 45% of revenue for the government and is paid by everyone irrelevant of their income and social status.

Tax on income and profits represents 30% of all government revenue, while at the other extreme are exports, which has grown enormously of late, where the sector only contributes 0.19% of all tax revenues.

The “unfair” structure does not change with the Plan Fiscal (Tax Plan) promoted by the government and the Partido Acción Ciudadana (PAC).

The government says that the progressivity of the tax regime does not occur in the collection, but the use of the money that they say, goes to the poorest.

“In what does the government spend our money?” is a question being asked by many as they are being asked to contribute more.

The fact is that the government of Abel Pacheco (2002-2006) had a surplus, which disappeared during the Arias administration (2006-2010), when government expenditures tripled.

So, where did the money go? Mainly in wages or better put, the increase in bureaucracy, as salary expenditures more than doubled during the period.

The other question is, “Is there a real cut in expenses?”

This year the government will pay out an estimated at ¢6.7 billion colones in legal expenses and another ¢38 billion colones to feed the ailing Caja Costarricense del Seguro Social (CCSS).

Many state institutions spend tons of money in varying services, which are supposed to better government services and infrastructure, something that is not being felt by the public.

Another area where the government spends money is in “propaganda”, this year spending 27% over last, for a pay out by taxpayers of ¢48.9 billion colones.

Another fact contributing to the government’s financial crisis is its inability to properly collect on taxes. According to the Contraloría General de la República (Comptroller’s Office), lost revenue due to improper collection last year was around ¢200 billion colones, slightly less than what the government expects to collect with the new tax plan.

Experts say that tax evasion – mainly to improper collections- is equal to two tax plans the government expects to adopt for Christmas.

The government’s answers to most of the questions are simply to create new taxes.

Word of the Day

struc·ture : \strək-chər\
Origin: Middle English, from Latin structura, from structus, past participle of struere to heap up, build — more at strew
First Known Use: 15th century
1: the action of building : construction
2 a: something (as a building) that is constructed; b: something arranged in a definite pattern of organization <a rigid totalitarian structure — J. L. Hess> <leaves and other plant structures>
3: manner of construction : makeup <Gothic in structure>
4 a : the arrangement of particles or parts in a substance or body <soil structure> <molecular structure>; b : organization of parts as dominated by the general character of the whole <economic structure> <personality structure>; c : coherent form or organization <tried to give some structure to the children’s lives>
5: the aggregate of elements of an entity in their relationships to each other <the structure of a language>
1: to form into or according to a structure
2: construct

More Vocabulary

Enormous: adj. marked by extraordinarily great size, number, or degree; especially: exceeding usual bounds or accepted notions
Irrelevant: adj.
not relevant : inapplicable
Surplus: n.
the amount that remains when use or need is satisfied

Love those Phrasal Verbs!

Pay out: to distribute (money, wages, etc.); disburse

  • Do you happen to know the amount of the payout that was done for the last fiscal year to the health ministry?

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