To figure out what is happening with President Laura Chinchilla’s proposal for $500 million in new taxes, expats need a scorecard. Here is is:
• The Sala IV constitutional court rejected Tuesday the way lawmakers had passed the measure, which already received an initial affirmative vote. The court said unanimously that the committee studying the measure agreed to lengthen the time to do so without approval from other lawmakers. The summary of the decision said that many of the amendments were not published as required by law. The court did not consider the substance of the tax bill.
The Poder Judicial announced the decision Tuesday evening. The decision means that the Asamblea Legislativa will have to start all over again to consider the measure which seeks to impose a 14 percent value-added tax among other levies.
• Casa Presidencial responded with a message of respect for the court and said that the president and her legal advisers would have to see the full decision, which is not yet available. Then Casa Presidencial will make a decision on how to proceed, it said.
• Juan Carlos Mendoza García, president of the Asamblea Legislativa, agreed that some 53 motions should have been published. He voted against the measure on first reading and said Tuesday night that the process showed lawmakers that there ought to be ways to combat tax evasion and spot persons in the government who are not doing their job. That was a reference to Fernando Herrero Acosta, the former minister of Hacienda and the principal legislative force promoting the new taxes. He resigned last week when La Nación published several stories about his own tax delinquencies. So did Francisco Villalobos Brenes, the top tax collector, for similar reasons.
• Lawmakers of the Alianza por Costa Rica that make up the Comisión de Control de Ingreso y Gasto Público said Tuesday they will call to a hearing Herrero, his wife, Florisabel Rodríguez Céspedes, and Villalobos to be questioned about their tax problems.
• The Poder Judicial said Tuesday that the Fiscalía Adjunta de Probidad, Transparencia y Anti corrupción had opened an investigation of Herrero and his wife for alleged illegal enrichment as a public
official. The judicial action followed by hours yet another disclosure by La Nación that said that
Herrero’s wife, until last week an adviser to President Chinchilla, had won a 17-million-colon ($34,000) public relations contract with the Refinadora Costarricense de Petróleo S.A. The problem was that the contract was a direct one in which there was no bidding, and the refinery, a state agency, asked three other firms to consider participating, but none was involved in the public relations business. They were building supply firms. The refinery attributed this to a computer input error that generated emails to the wrong companies. La Nación said that the education minister and President Chinchilla’s brother both endorsed the work of the firm run by Ms. Rodríguez in letters to the refinery.
• At Casa Presidencial President Chinchilla was reported to have signed a directive to create an elite unit of auditors in the Dirección General de Tributación to take action against tax fraud. The press release about the directive said that of 78 criminal tax fraud cases presented in March only one has gotten to court. The president also asked that conciliation not be allowed in tax fraud cases. With conciliation, suspects can buy their way out of prison. Only 49 of the criminal complaints are still active, said Casa Presidencial.
The tax flap began March 26 when La Nación reported that Herrero 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 real estate holdings. That is about $600 a year in taxes. President Chinchilla defended him at the time and called the matter regrettable carelessness. The newspaper also reported that other members of her cabinet had been equally careless in not updating their property tax values, thereby evading municipal taxes.
But then Herrero resigned just as La Nación was publishing an article April 3 that said Herrero and his wife failed to report 50 million colons or about $100,000 in income from a corporation in 2010. Later the same day the newspaper revealed that Villalobos, the chief tax collector, had been remiss on 2008 taxes.
He paid the tax that day but still resigned.
The matter moved into the criminal realm with the report Tuesday about how Herrero’s wife won the public relations contract with the state refinery.