Tax plan is not dead, president’s aides say

It’s been more than a week since the Sala IV shot down the president’s tax package, but members of the cabinet believe there is still a chance to pass the unpopular measure.

Their faith is so strong, there is no plan for an alternative fiscal plan, said Francisco Chacón, minister of Comunicaciones. The plan includes a 14 percent value-added tax.

While the government resolves the issue with the fiscal plan, President Laura Chinchilla Miranda and a vice president signed an interim decree to try to slow the country’s deficit Wednesday night. Thursday the executive branch pressed to the legislature a proposed Ley Para el Manejo Eficiente de las Finanzas Públicas or “law for the efficient management of public finances.” President Chinchilla announced her actions in a television address to the people.

Luis Liberman, the vice president involved, and Chacón gave a workshop to journalists Thursday morning inside Casa Presidencial to explain the new decree that will freeze all pay raises within the hierarchy of the central government, including the salary of the president, ministers and vice-ministers.

“If nothing is done, we will continue to spend. This will allow us to breathe. It will reduce an explosive debt,” said Liberman.

All salaries frozen are for those on the government who get paid more than three million colons a month, about $6,000.

As part of the new measure, the government will sell off all unused property not vital to the central mission, such as parking lots and vacant fincas, according to the president’s plan.

“What’s being sold is what the government doesn’t need, unnecessary property,” Liberman said.

Government properties such as the Asamblea Legislativa and the Casa Presidencial won’t be sold, Liberman said. If property is sold, it will be done in a transparent matter, he added. There is no date as to when the government property sale will begin. The starting point is as soon as Wednesday’s decree is published in La Gaceta official newspaper. The announcement of individual sales could take from days to weeks, said the vice president. He did not specify any properties that might be on the block. Casa Presidential in Zapote is, in fact, rented by the central government.

Another measure that is part of the president’s plan is a method of electronic registering of sales. Not many companies in the country use this modern method, the journalists were told.

The decree also gives a long list of items exempt from sales tax and said that the idea was to protect individuals with low incomes. What will be taxed now are luxury items that include caviar, salmon, rice for paella, kiwi, peaches, plums, cherries and bottled water.

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