President searches for options after tax plan setback

President Laura Chinchilla met privately with financial experts Thursday night in an effort to map out a strategy because a proposed tax plan has been derailed.

Casa Presidencial said that the president was meeting with economists, but most were politicians and former ministers who may have economics degrees.

There was no announcement of what happened, although any presidential actions probably will take place next week after Ms. Chinchilla returns from the Summit of the Americas in Colombia.

Casa Presidencial has said all along that there is no Plan B if the president’s tax plan were not passed. Now the administration needs a Plan B.

The Sala IV constitutional court said in a decision announced Tuesday that the process by which lawmakers passed the $500 million tax plan in the first of two required votes was not constitutional. Consequently the measure is headed back to committee.

Casa Presidencial said that another vote might be delayed for several months or might not take place at all. That last comment suggests that legislative support for the measure is fading in light of massive opposition by the public.

Court action notwithstanding, the tax plan suffered a serious blow in the court of public opinion when the newspaper La Nación made repeated disclosures of tax debts owed by members of the president’s cabinet. The finance minster and the nation’s chief tax collector resigned over their separate tax problems.
In another development Thursday, the Contraloría de la República, the budgetary watchdog, said investigators visited the offices of Refinadora
Costarricense de Petróleo S.A. Tuesday to look at the paperwork associated with a direct contract for public relations work given to the Procesos firm. This is the company operated by Florisabel Rodríguez Céspedes, the wife of former finance minister, Fernando Herrero. Until both resigned this week, she was a special assistant to the president.

Procesos easily won the $37,000 contract because it was the only firm that did that type of work that was invited to bid. Refinadora said that due to an input error three firms that supply building materials also were invited to apply, but they did not, as reported by La Nación.

Prosecutors said earlier this week that they, too, were opening an investigation into the contract.

Ms. Chinchilla has complained about lack of prosecution for tax crimes, and she proposes a change in the law that would prevent conciliation.

Perhaps by coincidence, the Tribunal Penal de Goicoechea sentenced to 10 years in prison Thursday a businesswoman who was convicted of fraud in faking expenses and not paying sufficient taxes. She was identified as Mayra Zamora Alvarado.

She operated a firm named Estrella Brillante S.A., said the Poder Judicial.

In addition to the jail term, she was ordered to pay the state 180 million colons, about $360,000.

The Poder Judicial said she faked facturas or invoices and understated sales in her tax reporting.

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