SAN JOSE – Thousands of people marched on Wednesday in downtown San Jose on the 17th day of a strike against the Costa Rican government’s plan to broaden consumption taxes and limit the pay of public employees.
The leader of the National Association of Public Employees, Albino Vargas, said “a million people” – a fifth of the population of Costa Rica – had participated in the march, sending a clear message to demand the government to cancel the tax reform and draft a new bill in consultation with the unions.
“A tombstone was placed on the tax bill today. It was already buried, but today we placed its tombstone. It is necessary to create a national political, social and multisectoral dialogue to seek a solution for Costa Rica in the short, medium and long term,” Vargas told reporters.
He said Wednesday’s march was a “second street referendum” against the tax reform, after a first massive demonstration took place on Sept. 12.
Unions are demanding congress to withdraw the tax reform bill and to draft a new bill based on a proposal that includes 39 measures, though the government insists on sticking with its existing plan.
President Carlos Alvarado went on live television Tuesday to urge lawmakers to approve to bill in October, saying “time is over.”
The government’s tax bill seeks to reduce the budget deficit estimated at 7.1 percent of GDP and to slow the rise in debt, which will surpass half of the GDP this year.
One of the main proposals in the bill is to convert the current sales tax into a value added tax of 13 percent levied on a broad range of goods and services, including some that are now exempt.
The bill also includes changes in income and capital gains taxes, as well as measures targeting the pay of public employees.