Costa Rica to Push Tax Reforms to Promote Growth with IDB Support

(MENAFN – Caribbean News Global)

COSTA RICA / USA – will continue its structural budget reform program aimed at strengthening the efficiency of budget management and equity and promoting a sustainable economic recovery with two loans totaling $ 500 million approved by the Inter-American Development Bank (IDB ).

The operations will provide budget support to the country and support policy reforms to ensure fiscal sustainability and maintain macroeconomic stability in the short and medium term.

One of the loans includes emergency measures to increase emergency health spending and assistance to households and businesses affected by the COVID-19 crisis. It also envisages a structural increase in spending on social programs focused on the most vulnerable communities in order to reduce poverty and inequalities, and aims to protect public investments in productive infrastructure.

The second loan supports structural reforms aimed at strengthening the effectiveness of the institutional macro-fiscal framework, increasing the efficiency and progressivity of the tax system, and improving the efficiency and equity of public spending. All of these measures will help strengthen public finances and promote a solid economic recovery in the post-pandemic phase.

The loans are $ 250 million each, with an interest rate based on LIBOR. The, which completes the economic program that the country has agreed with the International Monetary Fund, is for a period of 7 years, with a grace period of 3 years.

The, under the policy-based programmatic loan modality, has a repayment term of 20 years, with a grace period of 5.5 years.

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