COSTA RICA NEWS  – It is seldom in Latin America that an Administration cabinet member and the governing party are subject to probes of their income tax records. But the Costa Rican Finance Ministry is doing just that.

The Citizen Action Party (PAC) and Labor Minister Victor Morales are under the magnifying glass.

Morales is being questioned about his tax returns for 2008 to 2010 while he was director general of PAC. The Finance Ministry probe came about after the Supreme Elections Tribunal (TSE) questioned the party’s finances under his watch.

During that period, Morales’s gross taxable salary was 1.1 million colones per month. According to the TSE query, it appears that PAC did not deduct tax from this salary during the 22 months he worked for the party before winning the mayoral election in Aserri in 2010.

It appears that in the 2006-10 period the PAC records show that they deducted tax from only the first two of Morales’s 44 bimonthly salary payments. If this is true and not a clerical error, Morales owes the government 1.5 million colones in back taxes.

It is possible that Morales was unaware of the accounting error — how many of us study our salary stubs when we depend on the accounting office to do its job with deduction?

Morales himself says his conscience is calm about the whole thing. “I’m not going to hide behind the excuse of not knowing the law — I know the law. What I’m saying is that I simply contract to do jobs and fulfill my obligations and expect others to to as well.,” he said.

He says that he remembers receiving a net salary of a million colones monthly but doesn’t know how much he owed in social charges (such as Social Security) and taxes. Morales, also a former lawmaker, says that last April he asked for information from the PAC accounting office and Tributacioón, the income tax collector.

He no doubt knew that his finances, as a cabinet officer, would be combed carefully. But memories of that era are vague. A former PAC treasurer Leda Zamora (who resigned the post last month) says it will be hard to uncover PAC records of payment and she recommended during her time there that the party change their financial record keeping.

No doubt even a hint that a PAC official may not have paid his rightful taxes, no matter how understandable, is an embarrassment to the party that has based itself on transparency and honesty from its founding. The faulty record keeping system will make exoneration that much harder.

Article by iNews,, reposted with permission

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