Government And
Legislators Still At
Odds Over Diesel Fuel
Subsidy
Costa Rican president,
Oscar Arias, and leaders
of the political parties
in the Legislative
Assembly met yesterday
to discuss the
government's proposal to
revive the diesel
subsidy that government
announced two weeks ago
to offset the high cost
of diesel fuel, which
for the first time was
more costly than
gasoline.
However, those present
said the meeting was
nothing more than
kicking around the ball
and hail of idea to find
new alternatives to
reduce fuel consumption.
Arias said he was
pleased, that the three
legislators responded to
his call and affirmed
that he found support
for the idea of
eliminating the tax on
diesel fuel, which would
negate Tuesdays
increase.
The president did,
however, confirm that
the meeting did not
result in any agreement
in how to eliminate the
¢97.5 tax on diesel, a
fuel that is used in
more than 50% of the
vehicles in the country.
For his part, the
ministro de Hacienda (Revenue),Guillermo
Zúñiga, said that if the
tax is removed it would
leave a ¢120 billion
colones hole in the
country's finances.
"We are moving forward
in our study to find
alternative ways to
recover the loss,
interestingly enough
some of the ideas were
proposed by the
legislators", said
Zúñiga.
Zúñiga refused to list
the taxes that would be
increased to provide a
subsidy for diesel fuel.
The legislators were
clear that they are not
in favour of increasing
the tax on gasoline to
subsidize diesel. Rather
they would like to see
tax increases on
off-shore operations in
the country, more tax on
banking and financial
institutions and raise
the tax on luxury
vehicles, are some of
the alternatives being
tabled.
But first, legislators
will be looking at
increasing the sin tax,
tax on cigarettes,
liquor and gambling.
Another idea being
discussed is increasing
income tax.
Lorena Vásquez, leader
of the Partido Unidad
Social Cristiana (PUSC),
believes that pushing up
the tax on luxury homes
can generate some ¢30
billion colones for the
government coffers.
The head of the
Movimiento Libertatio,
Ovidio Agüero, was more
realistic than the other
legislators, saying
"lunch with the
president was great, the
rest was generic. It
will be difficult for us
to be in agreement to
raise other taxes to
subsidize diesel".
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