Lawmakers continue to hear criticisms of proposed tax fraud bill

A legislative committee still is wrestling with a proposed law on tax fraud. The thrust of the bill is to prevent tax fraud so the government collects more money.

The measure is in the Comisión de Asuntos Hacendarios where the head of a commercial association appeared Monday. He is Franco Pacheco of the  Unión Costarricense de Cámaras y Asociaciones del  Sector Empresarial Privado.

He questioned a proposed section of the law that would require those involved in private transactions like lending to make sure individuals were current with tax filings.

Pacheco said he had serious doubts, according to a legislative summary.

According to Article 18 of the law anyone who seeks to obtain any kind of  authorization, permit or permission from the central government or a municipality would have to show being current with tax filings.

Another article requires public or private lenders to first determine that would-be borrowers are current with their tax obligations.

Pacheco questioned the constitutionality of some of these measures.

Another speaker Monday was Rafael Sayagues of Ernst and Young S. A., who said Costa Rica would become only the second country in the world to require corporations to provide tax officials the names of shareholders who receive money. That also is in the bill.

Norway has such a requirement, but that country provides many important necessities for its citizens despite having a high tax rate, he said..

Many business operators are concerned about the lack of confidentiality, although the bill envisions creating a judicial court to handle such concerns.

Another speaker, Sergio García, a tax expert with KPMG Central America, S. A., said that the Costa Rican tax burden was 22.5 percent.

He said this was above the Latin American average.

In official action Monday the Asambea Legislativa approved on first reading No. 19.909, a bill to tighten money laundering rules. When passed and signed, the national laws will be in accord with the standards of the  Grupo de Acción Financiera Internacional.

The assembly also approved on first reading, No. 19.904, a bill that expands the definition of international bribery to include promises as well as actually payments.

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