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Costa Rica rating downgrade spurs VAT reform

  • VAT
  • 26 September 2014 | Richard Asquith

Costa Rica rating downgrade spurs VAT reform

Costa Rica is to join the growing number of countries seeking to stablise their government deficits through the introduction of a modern Value Added Tax regime.

The movement to overhaul the current 13% simple sales tax has come following a downgrade of the economies credit rating by Moodys. It slipped from BB1 to BAA3. Moody’s noted the political difficulties on agreeing on a new VAT regime as one of the reasons for the downgrade.

It is estimated that the VAT reform could generate over $0.5 billion, and help reduce sales tax fraud.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.