Tuesday´s News

Costa Rica: Tax Bill Gathers Opposition

From: http://www.insidecostarica.com

The tax measure hammered out in a meeting between President Laura Chinchilla (Partido Liberación Nacional - PLN) and Otton Solis, chief of the Partido Acción Cuidadana Party (PAC) has inevitably run into a few objections Thursday in its first appearance on the floor of the Legislative Assembly.

The objections number 1,250, to be exact, the vast majority of them (1,100) from the Movimiento Liberatio (ML), but other smaller parties weighing in as well.

The Broad Front Party (Frente Amplio) registered 100, the PASE party 35 and Social Christian Unity (PUSC) 20. That was the count Friday morning, but parties may present others through Monday.

Thereafter, deputies offering the proposed changes to the plan and those opposing amendments have four days in which to discuss the bill and insert alterations in it. Then it will be voted on.

The reform, in case you got in on the action too late, proposes to turn the 13% sales tax into an ad valorem tax. It would also make the sales tax 14% and include many services now exempt.

Libertarian deputy Manuel Hernandez whose party opposes the tax package does not rule out presenting more amendments on Monday. If PAC and Liberation can keep their votes together, they have a chance to push the measure through.

But several groups have a push back planned outside the unicameral congressional halls on Central Avenue in downtown San Jose. For example, the high school teacher's union, APSE, strongly opposes the bill as now written.

The teachers plan to mobilize a broad front of university students, unions, social organizations, banana workers--even Caja anesthesiologists and physicians [who are already on strike.]

Chief target of APSE is a 2% tax on private education contained in the bill. "As an organization defending the right of education," said Beatriz Terreto, APSE president, "We are worried about the tax on private education, lest the cost of registration and courses becomes unpayable."

But other onerous contents of the bill are a tax similar to education on private medical care, a 15% tax on dividends for companies in the free zone industrial parks. This latter tax, although it would not go into effect until 2015, has already caused some foreign companies to rethink their plans for expansion here.

Both PASE and Broad Front representatives have presented modifications to the latter measure. An estimated 60,000 persons are workers in the free zones that were made tax free by past administrations to attract just such businesses. It is unusual for these tiny parties to side with businesses.

Manrique Oviedo, PAC floor leader, dismisses the majority of the amendments as "irrational," meant simply to slow down the passing of the bill.

Word of the Day

Inevitable
in·ev·i·ta·ble: \i-ne-və-tə-bəl\
Origin: Middle English, from Latin inevitabilis, from in- + evitabilis evitable
First Known Use: 14th century
Adjective
incapable of being avoided or evaded <an inevitable outcome>
Adverb
1: in an inevitable way
2: as is to be expected <inevitably, it rained>

More Vocabulary

Ad valorem: adj. imposed at a rate percent of value
Alter: v. to make different without changing into something else
Amendment: n. a change in the words or meaning of a law or document
Exempt: n. one exempted or freed from duty
Lest: conj. for fear that —often used after an expression denoting fear or apprehension <worried lest she should be late> <hesitant to speak out lest he be fired>
Onerous: adj. involving, imposing, or constituting a burden : troublesome
Unicameral: adj. having or consisting of a single legislative chamber