Finance minister involved in tax scandal submits resignation

The finance minister bowed out Monday to protect the president’s plan for new taxes.

He had been under fire because he and his wife evaded an equivalent of 300,000 colons in property taxes a year for 10 years by failing to update the value of their holdings. That was revealed by the Spanish-language La Nación March 26. Herrero was the leader of the administration’s effort to pass the 14 percent value added tax. The amount is about $600 a year.

Opponents of the tax cited widespread evasion that should be attacked first, so the revelation jeopardized the tax, which already has received a first vote in the legislature.

Initially, Laura Chinchilla Miranda defended the minister, who headed the Ministerio de Hacienda. She blamed his failure to pay on regrettable carelessness. However, it became clear that the newspaper’s articles had generated a wave of criticism. La Nación said Herrero and his wife failed to report the value of an Escazú home for nearly a decade. Municipal tax is assessed on the self-reported values of homeowners, but the newspaper used established land values to make comparisons between what was on the books and actual value.

However, the resignation may have been in anticipation of another La Nación article today that said Herrero and his wife failed to report 50 million colons or about $100,000 in income from a corporation in 2010.

Vice President Luis Liberman received the resignation, but the Casa Presidencial announcement was accompanied by kind words from Ms. Chinchilla.

Liberman will supervise temporariliy the ministry, which includes the budgeting and tax collecting agencies.

There was no word about other ministers whom the newspaper identified as tax evaders.

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