DDP 744. Sonia Cavallo. "Tax Reform in Costa Rica." February 2000. 38 pp. Central America Project Series

In 1998, Costa Rica was about to undergo a new tax reform that would simplify the tax structure and raise additional revenue to repay debt and finance future capital formation. This paper analyzes, in light of the prevailing tax structure, a tax reform proposal that included the elimination of 1500 excise taxes. After exploring some general aspects of fiscal policy and the prevailing tax structure, it describes some specifics of the Costa Rican tax structure and tax administration reforms. Finally, it provides an assessment of the revenue impact that the proposed tax structure reform may have on public finances.

Keywords: Costa Rica, tax structure, tax reform

JEL Codes: H200, H220, H240, H250, H260

Sonia Cavallo has an economics degree from Universidad de San Andres, Buenos Aires, Argentina (1996) and a Masters in Public Policy degree from the Kennedy School of Government, Harvard University (1999).