Costa Rica’s surprise frontrunner favours eventual tax hike

SAN JOSE,  (Reuters) – A centre-left former diplomat who has emerged as the surprise leader of Costa Rica’s presidential race vows if he wins a runoff vote to prepare the ground for eventual tax hikes seen as crucial to preserving the credit rating of Central America’s No. 2 economy.

Luis Guillermo Solis
Luis Guillermo Solis

Luis Guillermo Solis, an academic who has never been elected to public office, held a narrow lead following Sunday’s election, riding a wave of disgust over government corruption. He faces a second-round runoff vote in April against centrist ruling party candidate Johnny Araya.

The supporters of leftist lawmaker Jose Maria Villalta, who came in a distant third, could help propel Solis to victory, though Villalta has not yet endorsed him.

Solis, 55, has said he will not present fiscal reforms aimed at boosting tax receipts for two years if he wins. But he says it is vital to lay the groundwork by first combating tax evasion, government waste and contraband.

“If we manage to build a credible platform against corruption, I think we could convince people it is necessary to raise some taxes with a progressive logic,” he told Reuters in an interview on Tuesday.

“I am convinced that we will need fiscal reforms,” he added.