Tax Reform Plan Approved, Finally!
Finally, and this is not a joke, after three years of debate, the Legislative Assembly has approved the first reading of the Tax Reform. The vote as 32 in favour and 15 against, registered at 7:33pm.

The concrete support by the legislators of the Partido Liberación Nacional (PLN), combined with the majority of votes from the Partido Unidad Social Cristiana (PUSC) and the Partido Acción Ciudadana (PAC), played the dominant role in the government obtaining the necessary votes for the approval,

Against the bill's passing were, among other, Federico Malavassi and Humberto Arce, who ran for president and came near last in the February 6 voting.

Deputy Laura Chinchilla and possibly the next first vice president if Oscar Arias is proclaimed president, said this is a positive message to the international markets that Costa Rica is open for business and they can now make key business decisions.

Chinchilla added that it is now important that the government administer properly the resources contained in the reform package.

Of course, in typical Costa Rican style, opposers to the tax reform are threatening to send the bill to the Constitutional Court, which would then stall the process of the required second reading before it can come into effect.

If the Legislature does not move quickly, the appeal to the Constitutional Court could stall the bill for at least a month.

The second reading has been scheduled for Monday Feb. 20.

The new tax reform pretends to give the government additional financial resources with higher taxes and better collection regulations and place a higher tax burden on those who earn more and lower taxes for those in lower income brackets.

The tax plan includes many changes to the current fiscal policies. The document is highly technical with some 500 pages, that will affect real estate and foreign investing, including provisions for a global tax.