Costa Rican finance minister urges tax reform to cut $1.27 billion deficit

Costa Rica should overhaul its tax system to rein in its fiscal deficit, Finance Minister Fernando Herrero said.

The country's deficit is $1.27 billion, or approximately 3.5 percent of gross domestic product, as heavy spending to support the economy during the global financial crisis has outstripped revenues.

"This situation must be resolved soon with a substantial increase in income, which can only come through tax reform, or there will be a significant deterioration in the macroeconomic stability of our country in the coming years," Herrero said.

Original source: Reuters