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Autor: Writer

~ 09/08/06

By the A.M. Costa Rica staff

The central government wants the legislature to hurry up and pass a tax reform measure.

Rodrigo Arias Sánchez, the president’s brother and minister of the Presidencia, met with leaders of the Movimiento Libertario Tuesday for two hours to encourage the party to go along with the plan.

The party representatives were Otto Guevara and Evita Arguedas.

Guevara, who is leader of the party but not a legislator, said that when the central government provides a copy of the proposed tax plan his party will compare it to the existing law and make observations on the document.

Arias said the country needs the money.

Arias wants legislative leaders to keep the tax law on a fast track so there will be a quick vote. This is a procedure created by the previous Asamblea Legislativa for the Abel Pacheco administration’s version of the tax law. Under the fast-track provision, legislators are limited in making speeches.

Libertarians hung up the Pacheco plan with thousands of amendments, each of which required discussion and a vote.

The libertarians seem to have raised the issue of unconstitutionality with Arias Tuesday. They oppose putting the legislation on the fast track.

The Arias tax plan has not been fully explained, although it is less encompassing than that proposed by Pacheco’s administration.

Certainly there is a value-added tax instead of a sales tax. There has been a proposal to assess a $200 tax on each corporation. There also is a proposal to tax bank transactions and one to tax luxury homes about half of a percent to wipe out slums.

Arias said the country also needs the money to eliminate the huge debt run up by the Banco Central in defending the colon against the dollar.

As far as income tax, Arias said that the plan the government has guarantees that the “most humble” don’t pay taxes until their income reaches 500,000 colons (about $970) a year. Between 500,000 colons and 900,000 colons ($1,750) the tax rate in the government proposal  is 8 percent, he said. He said the graduated income tax would be similar for companies.

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