Costa Rica’s Proposed Tax Reforms Stalled
Costa Rica’s long-awaited Fiscal Reform - tax reform
- package has suffered another setback as
legislators will not be able to vote on the plan
until the Sala IV Constitutional Court decides
whether the former president of the Legislative
Assembly acted unconstitutionally.
The Fiscal Reform Plan was first conceived two years ago to bolster
the government’s tax revenues, pay off the country’s growing foreign
debt, and reduce the deficit to 2.65% of GDP through a series of tax
hikes and improved collection methods.
However, the implementation of the reform has been dogged by delays,
as Deputies in the Legislative Assembly have failed to meet
successive deadlines for approving the legislation.
In the latest hold-up, two deputies are alleging that the
then-president of the Legislative Assembly Mario Redondo violated
the Constitution by acting with secrecy and without the required
approval of two-thirds of lawmakers last March in an attempt to
accelerate the debate on the tax package.
Last month, the Sala IV, accepted the action by the deputies. If
their claims are upheld, it could mean that all changes to the tax
plan made since March this year will be annulled.
According to reports, some experts consider that could result in
death for the fiscal reform plan.
600.000
New GSM Lines in Doubt
Missed out on your purchase of a GSM line? ICE - the
state owned telecommunications monopoly - announced Thursday, that
all 15.000 GSM lines that went on sale Monday were gone. However,
another 10.000 were made available Friday morning, which are
expected to be sold out by Tuesday.
And that will be that for some time as the announcement came
yesterday of a resolution by the Contraloría General de la República
- Comptroller's office - that there are 28 errors in the contract
between the Instituto Costarricense de Electricidad (ICE) and
Ericsson company.
Ericsson had signed a deal with ICE, worth $130 Million Dollars,
to provide 600.000 GSM lines that are to be installed by December of
this year and marketed by ICE not later than March of 2005.
Among the reasons for the decision by the Contraloría are:
- it is not clear if at the end of the six year contract
lease, ICE acquires ownership of all the towers and equipment
- the contract doesn't clear set out the differences between major
and minor failures
- there are doubts as to whether Ericsson can deliver the tower and
radio bases in the time it is spelled out in the contract.
The resolution also touches on the parallel investigations that are
being conducted with respect with the Ericsson contract and members
of the ICE board of directors.
Two directors were fired this week and sub-director Alavaro Retana
has not been at his post for some months, stemming from a trip made my managers of ICE to the
Czech Republic, resulting informal meetings with the president of
Ericsson Costa Rica.
President Abel Pacheco was asked earlier this week if the dismissal of the two and
ongoing investigation will affect the purchase made from Ericsson,
to which he replied "everything will be done according to the law."
Meanwhile, customers who have been patiently waiting the anticipated
new GSM service, which will have many more features that the current
GSM service installed by the French firm Alcatel, will have to wait
even longer.
Union Files Criminal Charges Against President Pacheco
The Asociación Nacional de Técnicos y Trabajadores de la
Energía y Comunicaciones (Anttec), yesterday presented a criminal
charge against President Abel Pacheco for an illegal appointment and
incompletion of his duties as president.
The charge was filed by the president of the union, Jorge Arguedas,
to the Ministerio Público.
Arguedas claims that, president Abel Pacheco de la Espriella, has
mocked their demands on various occasions and is not acting in good
faith.
The union had asked that Pacheco remove Pablo Ureña as a director of
Instituto Costarricense de Electricidad (ICE), as he does not count
with the necessary requirements to be a director of the public
institution.
According to the ICE constitution, the board of directors is to be
comprised of three engineers, an economist, two businessmen with
experience in industry and finances and a legal expert.
Arguedas and his union charge that Ureña is not a lawyer, nor an
engineer, nor a businessman - his profession is a "writer" and thus
his appointment contravenes articles 332 and 337 of the Penal Code.
Arguedas says that he and other members of his group have asked
Pacheco on many occasions to take a step back on the appointment,
however, Pacheco has left them no choice but their current course of
action.
Arguedas is confident that the Fiscal General de la República - the
chief prosecutor - Franciso Dall`Anesse will attend to his charges.
Banana Exports Up, Coffee Does Not Recover
The exports of Costa Rican bananas experienced a
light increase, 1.2 percent, this year's first
semester, as compared to the same period in 2003,
according to data from the National Banana
Corporation (CORBANA in Spanish).
From January through June last year, the country
exported 49.9 million cases of bananas, while that
figure increased to 50.5 million through last month.
However, the hopes of Costa Rican coffee growers as a result
of an increase of the commodity in the international
market where short lived, since a marked drop in
recent weeks have taken the prices back down. On the
other hand, sector sources said that the sales of
gourmet coffee have commanded a much better price in
New York, a positive trend for only part of the Tico
growers.
 News
Briefs
-
The Asociación Nacional de Educadores (Ande), the Unitaria Sindical y
Magisterial (Cusima) and the Asociación de Profesores de Segunda Enseñanza
has made it official that there will be a general strike on Thursday 29
July. The union objectives is to protest their discontent with a series of
violation of rights on the part of the government and the recent increase in
salaries of only 4% when they had asked 9%.
-
Taxi drivers have asked the Autoridad Reguladora de los Servicios Públicos (Aresep)
- the regulator of public services - for an increase in taxi fares of ¢15
per kilometer. The increase would see fares go from ¢265 to ¢280 for the
first kilometer and from ¢150 to ¢160 for each additional kilometer in the
metro area and from ¢155 to ¢170 per kilometer in rural areas.
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