Costa Rica tax reform to provide safety net for poor

If the Costa Rican government's proposal for a radical fiscal reform is approved, thousands of people will be plunged into poverty. As a consequence there government aims too offer them a safety net.

The first stage will be to identify the items in the basic basket of consumer goods for tax purposes that the poor need the most. That should mean which items will qualify for the preferential 1 percent rate for value-added tax.

The law establishes a second compensatory measure to help the poor. Non-contributory allowances can be provided  by the state social security system, La Caja de Seguro Social.