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No easy solution for Costa Rica's fiscal headache

Wednesday, July 4, 2018

While the government of Costa Rica reviews 1,300 actions that pay no taxes, the truth is that there is very little possibility of reducing the fiscal deficit simply by eliminating all the current exemptions.

One of the hottest issues involves the exemption from income tax enjoyed by workers in the Free Zones. That alone could cost the government about $500 million a year.

However, the introduction of income tax would simply move the Free Zone companies to move their factories to other countries.