After 39 hours of discussion and voting on the last motions on the Plan Fiscal (Tax Reform), legislators are expected to start their final discussion and ‘first debate’ vote this Friday afternoon.
Legislators on Thursday completed processing the 368 outstanding motions and to work a double shift Friday, to move forward the controversial bill 20,580 promoted by the government of Carlos Alvarado, and opposed by the public sector trade labor unions that today are on their 26th of a national strike.
The Ministerio de Seguridad Publica (MSP) – ministry of security – is not taking chances, expecting fierce protests. For this, from the early hours of Friday morning, the Fuerza Publica (national police) have cordoned off the area of the Legislative Assembly in downtown San Jose, increase a police presence and early morning television footage showed a riot police response preparation outside the public eye.
The bill reaches this culminating point after a long road that, practically, that began the day in which the Constitutional Court declared unconstitutional the procedure of the Tax Solidarity Law bill promoted by the administration of Laura Chinchilla (2010 – 2012).
That (court) decision meant that, during the 2014 presidential campaign, the need for a tax reform was a matter of intense debate and that the then president, Luis Guillermo Solís (2014 – 2018), argued that he would not promote a tax project during the first two years of his administration.
However, in August 2015 two bills were presented to the Legislative Assembly, one to transform the general sales tax on goods into a value added tax (VAT) on goods and services and another to make a series of reforms to the tax on income.
The opposition of several political parties prevented these bills from advancing and the Government, after several attempts to consolidate a single text, delivered to Congress, at
the end of October 2017, the bill 20,580.
The circumstances of the 2018 electoral campaign prevented any progress of the bill, until after the first round voting, in February, and the legislators of the 2014-2018 constitutional period agreed to approve a fast-track procedure, which ultimately did not turn out to be so expeditious.
The legislators (2018-2022), not wanting the initiative to get stalled in procedure, modified the fast track in June, opening the bill to present motions, allowing the Government to introduce a series of proposals from the Finance Minister, Rocio Aguilar, to toughen the reform and, with that, try to collect more tax and from new sources.
Although the legislators originally asked the Government for greater actions on public spending, with the fiscal initiative in their hands, they approved a series of motions to modify the text and, little by little eroded the original plan of Finance Minister Aguilar.
The Government argues that though ‘not absolutely popular, it is absolutely necessary’.
For the bill to be approved it requires 38 of the 55 votes.
The Government is confident it has sufficient votes of its party, the Partido Acción Ciudadana (PAC) and the Partido Liberacion Nacional (PLN) and independents to move the bill to the second and final vote.