January 19, 2021

Supreme Court of Costa Rica determines that fiscal reform affects its autonomy

Supreme Court of Costa Rica determines that fiscal reform affects its autonomy



The Supreme Court of Justice of Costa Rica today determined that the tax reform approved in the first debate by Congress on October 5 affects its autonomy, before which it suggested a series of changes or else the project will need greater support from legislators.

In today's session of the plenary session of the Court, the judges decided with 11 votes out of 16 present, that the fiscal reform will affect the judicial independence in case there are not changes in several articles.

Six magistrates of the Constitutional Chamber were inhibited from voting before the eventual arrival of the project of fiscal reform for knowledge of that court.

The articles indicated by the magistrates are related to reductions of salary bonuses, a fiscal rule to contain the State's expenditure, as well as the centralization of the evaluation of the performance of the workers of the public sector and of the concentration of rectoría of public employment of the State in the Ministry of Planning.

After the vote of the Full Court, the Congress could hold the second debate but will need a qualified majority of 38 votes out of the 57 deputies that make up the Legislative.

The first vote on the tax reform was supported by 35 deputies, which would force the government to negotiate for at least three more votes in favor of the initiative.

The other option is for Congress to apply in some way the changes suggested by the Full Court.

The pronouncement of the Full Court is part of the consultations made by the Congress to various state institutions after approving the tax reform in the first debate.

This fiscal project is considered by the Government of President Carlos Alvarado as a priority to alleviate the deficit, stabilize finances, generate confidence in international markets and avoid an economic crisis.

According to the Government, the tax plan seeks to collect fresh resources equivalent to about 1.2 percent of gross domestic product (GDP) to combat the projected deficit at 7.1 percent of GDP by 2018.

The reform converts the sales tax of 13 percent into one of value added (VAT) of the same rate, but that will tax the services.

It also includes changes in income tax, capital income, global income and measures to reduce public spending, such as the reduction of salary bonuses and a fiscal rule.

The unions began on September 10 a strike in rejection of this tax reform, because they believe that it will hit the middle and lower classes more.

The strike has been losing strength and according to the Government, 98 percent of the workers who remain in the movement correspond to the education sector.

The strikers held a rally outside the Judicial Branch today to demand the judges reject the tax reform and have announced that they will continue to pressure the Constitutional Court to declare the bill unconstitutional because of the fund and the way it has been processed. in Congress.

"This is a movement that defends the basic basket, public health, free and compulsory public education for all and that in this project they want to tax more, this is already an extremely expensive country so that we do not defend it," he said. Efe the president of the National Association of Educators (ANDE), Gilberto Cascante.

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