Costa Rican President Confident That Tax Plan Will Finally Pass

by Mike Godfrey, Tax-News.com, Washington

16 February 2006

Abel Pacheco, President of Costa Rica for a while longer, has expressed confidence that the long delayed fiscal reform plan, which seeks to bolster tax revenues and reduce the country's debt, will soon receive the Legislative Assembly's approval.

The 500 page tax plan faces a possible preliminary vote later today (February 16), although a busy legislative session may lead to the postponement of the vote.

The tax plan will introduce some major changes if passed, such as a switch to worldwide taxation from the current territorial tax system. The plan would have to pass a second vote in the Legislative Assembly before it can be signed into law by the president.

Mr Pacheco has indicated that attempts will be made to put other legislative business pending in the assembly on hold in order to speed the tax bill's progress.

First proposed in 2002, the fiscal reform plan has been bogged down for many months whilst its opponents used a number of delaying tactics to prevent its passage.

However, after the recent election, a new intake of pro-tax reform politicians to the congress which begins in May could eventually sway the balance.

Both Oscar Arias Sanchez, presidential candidate from the Liberacion Party, and his Accion Ciudadana rival, Otton Solis are known supporters of the tax plan.

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