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Government proposes single tax on INS profits to reduce debt and face COVID-19

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To reduce public debt and face the emergency caused by COVID-19, the Government of the Republic will present next week a bill that creates a single tax on net profits of the National Insurance Institute (INS).

The Ministry of Finance estimates that this tax could generate 288 billion colones that will be used to reduce the central government debt and face the emergency generated by the COVID-19 outbreak.

The information was released this Thursday by the President of the Republic, Carlos Alvarado, through his official Facebook profile, together with the Minister of Finance, Rodrigo Chaves, and the Executive President of the INS, Elian Villegas.

The initiative proposes the use of the trust figure and an issue of securities for a sum close to 288 billion colones, which will be placed among the investing public. Of these, around 213 billion will be placed for public purchase by investors, and 75 billion would be acquired by the National Insurance Institute itself.

Minister Chaves said that this project alleviates public finances: “It offers the liquidity that the country requires to reduce the interest burden that burdens public spending, in addition to representing an important flow to finance emergency measures before COVID-19” , said.

This new tax would replace the income tax paid by the INS and 25% of the profits that are currently transferred to the State and eliminate other contributions that must be made to the Costa Rican State.

The INS will maintain its contribution to the Invalidity, Old Age and Death (IVM) regime and to the National Institute of Statistics and Censuses.

INS is a company owned by Costa Ricans and is to benefit them. This project is a good example of this, said the executive president of the INS, Elian Villegas. “We want the big winner to be Costa Rica,” he emphasized.

This project is part of the Protect plan, whose objective is to accumulate liquidity to react responsibly to needs and according to the evolution of the emergency caused by COVID-19.

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