Costa Rica proposes new tax to curb deficit

Costa Rican President Luis Guillermo Solis said he would propose tax changes to raise more than $555 million a year in new revenue, days after Moody's downgraded the country's sovereign debt rating to junk.

Solis said that, by the end of the year, his government would suggest a bill to change the country's 13 percent sales tax into a value-added tax, VAT, which is harder to evade and the government argues is more progressive.

Earlier in September, Moody's downgraded Costa Rica's sovereign credit rating to junk, citing continued inaction by politicians to address a growing fiscal deficit.

Source: Reuters