Public finances in Costa Rica: Difference between revisions
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There is no [[VAT]] in Costa Rica, but the there is a generally applied sales tax of 13% that, combined with excise taxes on specific consumption goods raises around half of government revenue. Income taxes are levied at increasing rate, beginning at 10% for annual income over Costa Rican colón 41,112,000. As of 2010, the top rate of 30% applies to people earning in excess of Costa Rican colón 82,698,000.<ref>Ministry of Finance (in Spanish) http://dgt.hacienda.go.cr/infotributaria/Paginas/RegimenTributarioTradicional.aspx</ref> |
There is no [[VAT]] in Costa Rica, but the there is a generally applied sales tax of 13% that, combined with excise taxes on specific consumption goods raises around half of government revenue. Income taxes are levied at increasing rate, beginning at 10% for annual income over Costa Rican colón 41,112,000. As of 2010, the top rate of 30% applies to people earning in excess of Costa Rican colón 82,698,000.<ref>Ministry of Finance (in Spanish) http://dgt.hacienda.go.cr/infotributaria/Paginas/RegimenTributarioTradicional.aspx</ref> Nominally, employers are responsible for the bulk of social security contributions. |
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Nominally, employers are responsible for the bulk of social security contributions. |
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Revision as of 07:30, 16 February 2011
The pattern of public expenditure and revenue in Costa Rica is typical of a middle income country. According the CIA World Factbook, in 2008, central government revenue was US $4,604 million, approximately 15% of GDP. Meanwhile expenditure was $4,552 million, producing a small overall surplus of $52 million.[1]. In subsequent years, expenditure has grown faster than income, producing deficits.
Revenue.
The major sources of revenue are income taxes, indirect taxes, social security contributions and customs duties. According to figures prepared by the Costa Rican government for the International Monetary Fund, the basic breakdown as a percentage of GDP is as in the table below.[2]
| Year | 2007 | 2008 | 2009 |
|---|---|---|---|
| Tax revenue | 15.2 | 15.6 | 13.9 |
| Direct taxes | 4.6 | 5.1 | 4.7 |
| Sales tax | 5.9 | 6.0 | 5.0 |
| Excise, customs, and others | 4.8 | 4.6 | 4.3 |
| Nontax revenue | 0.3 | 0.2 | 0.3 |
| Contributions to social security | 6.3 | 6.7 | 7.1 |
| Operating balance of public enterprises | 1.0 | 0.5 | 0.6 |
| Total Revenues | 22.8 | 23.1 | 21.9 |
There is no VAT in Costa Rica, but the there is a generally applied sales tax of 13% that, combined with excise taxes on specific consumption goods raises around half of government revenue. Income taxes are levied at increasing rate, beginning at 10% for annual income over Costa Rican colón 41,112,000. As of 2010, the top rate of 30% applies to people earning in excess of Costa Rican colón 82,698,000.[3] Nominally, employers are responsible for the bulk of social security contributions.
Expenditure.
The largest components of expenditure are education (21.3% of government expenditure in 2007/08), social protection (21.1%) and healthcare (19%). There is no expenditure on defence. [4]. In cash terms, expenditure has risen steeply: healthcare expenditure rose by a factor of 4.5 between 1999 and 2008, while social protection rose by a factor of 4 over the same period.[5].
Borrowing and Debt.
According to the IMF[6] (the source for the table below), in most years recently Costa Rica has run fiscal deficits, but in 2007 and 2008 small surpluses were reported. Combined with some growth of the economy this has produced a decline in the debt to GDP ratio. The year 2009 saw a significant decline in the state of public finances and the IMF is forecasting deficits from 2010 to 2013.
| Year | 2007 | 2008 | 2009 | 2010 (est.) |
|---|---|---|---|---|
| Overall balance (% GDP) | 1.2 | 0.1 | -4.0 | -4.5 |
| Combined Public Sector Debt (%GDP) | 43.2 | 35.7 | 37.9 | 37.9 |
References
- ^ CIA. The World Factbook. https://www.cia.gov/library/publications/the-world-factbook/geos/cs.html
- ^ IMF, 2010, Costa Rica: Third and Final Review Under the Stand-By Arrangement—Staff Report; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Costa Rica. IMF Country Report, 10/162. http://www.imf.org/external/pubs/ft/scr/2010/cr10162.pdf
- ^ Ministry of Finance (in Spanish) http://dgt.hacienda.go.cr/infotributaria/Paginas/RegimenTributarioTradicional.aspx
- ^ International Monetary Fund Government Statistics, 2008, Table W6. Outlays by Function: General and Central Government
- ^ International Monetary Fund Government Statistics, 2008, Table W6. Outlays by Function: General and Central Government
- ^ IMF, 2010, Costa Rica: Third and Final Review Under the Stand-By Arrangement—Staff Report; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Costa Rica. IMF Country Report, 10/162. http://www.imf.org/external/pubs/ft/scr/2010/cr10162.pdf