Costa Rican president signs tax and Eurobonds laws

September 25, 2012

Tuesday was a good day for President Laura Chinchilla and her National Liberation Party government. After a brief speech by Finance Minister Edgar Ayales, Chinchilla signed three tax and finance bills into law.

The first two, the Fiscal Transparency Bill and the Bill for Strengthening Tax Administration, are aimed at providing better government access to taxpayers’ financial information, closing tax loopholes, putting in place stronger sanctions to force better cooperation with tax authorities, and getting Costa Rica off the Organization for Economic Cooperation and Development’s “gray list” of countries not up to First World standards in international sharing of tax information.

The last of the three new laws is the Eurobonds Bill, to allow the Costa Rican government to issue up to $4 billion in dollar-denominated 10-year bonds, to obtain financing from the Eurodollar market.

Vice President Luis Liberman, back from a recent trip to China, had good infrastructure news for Costa Rica. The Chinese government has agreed to finance and build a widening of a 237-kilometer stretch of Route 32, the highway linking San José and the Atlantic port of Limón. The two-lane stretch of highway between Rio Frío and Limón has for years been inadequate for the heavy container truck traffic generated by 80 percent of Costa Rica’s exports and imports channeled through Limón port.

The government, constrained in infrastructure spending by its fiscal deficit problem, has negotiated this project as the best way to address what has become not only a commercial but a public safety problem.

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