Municipal leaders are protesting a proposal in the Legislative Assembly that would reduce property taxes for farmers.

The reduction, they say, could cause local governments to bankrupt, as property taxes represent as much as 40 percent of municipal budgets.

Speaking before legislators in San José at a meeting Thursday, the executive president of the Institute for Municipal Development (IFAM) Erika Linares said, “Approving this reform to the Property Tax Law would differentiate one economic activity from another, opening the door for other sectors – for example, real estate, residential tourism or commercial entities – to ask for the same. We cannot privatize profits and socialize losses at the expense of the rest of Costa Ricans.”

Because local education boards receive 10 percent of these funds, (rural) schools across the country would not have money to buy adequate teaching materials and to maintain their infrastructure, Linares said.

According to Luis Fernando Mackeld, IFAM vice president, if farmers get a tax break under this reform, there's a fear that subsequent owners of that property would also have the advantage of paying less in taxes, even if they use the property for a hotel or a housing development.

The proposal, which would reduce property taxes from 0.5 percent to 0.1 percent, was only recently introduced into the Legislative Assembly.

Luis Barrantes, legislator with the Libertarian Movement, proposed the bill with the argument that reducing property taxes would actually bring more money for cities and towns.

Barrantes pointed to Estonia's low-rate flat tax as an example that helped spur that Eastern European country's economic growth. He's hoping the same would occur here.

“This bill will bring an increase in income to municipalities,” Barrantes said. “The Finance Ministry says more than 90 percent of property is valued at less than
₡ 10 million, which is less than $20,000 – that's absurd!”

Barrantes argues that by lowering property taxes, it will be easier to compel landowners to come forward with the prices that are closer to the real value of their property.

Alex Leff contributed to this report.

Despite increasing international concerns about Nicaragua's governance issues, the International Monetary Fund (IMF) – which President Daniel Ortega has long railed against – threw the Sandinista government a much-needed lifeline yesterday by approving the second and third reviews of the country's economic performance, qualifying Nicaragua to receive a combined total of $85.9 million, with an immediate disbursement of $37.8 million, according to the IMF.

The decision by the agency, which had effectively frozen aid to Nicaragua since the end of 2008, will provide much needed funding to the cash-strapped government. Nicaragua has already had to cut its 2009 budget on three occasions this year.

Takatoshi Kato, deputy managing director and acting board chair of the IMF, said in a statement that as part of the agreement, the Nicaraguan government will have to gear monetary policy to keep inflation low, while protecting international reserves.

He said Nicaragua's banking system remains sound, though “increased vigilance will be required in light of growing non-performing loans.” He said the government will encourage a “market-friendly and voluntary resolution in the case of troubled debtors” in Nicaragua's unregulated microfinance sector.

The IMF also stressed the need for Nicaragua to implement a series of structural reforms, in the energy sector and pension system, as well as improvements to revenue administration and fiscal policies.

Kato also said that “Strengthening governance and the business climate will be critical to leverage donor support and improve growth prospects.”

Nicaragua's Central Bank, for its part, said the IMF's decision shows that the government is committed to maintaining macroeconomic stability, “even though the Nicaraguan economy has been affected by the global economic and financial crisis.”

The opposition says the IMF's decision will give Nicaragua “more breathing room,” but worries that it will send a message of appeasement to President Ortega.

“This may cause Ortega to maintain an aggressive tack on governance issues,” said opposition lawmaker Francisco Aguirre, of the National Assembly's Budget Commission.

He can fly: Jason Torres has lift off of a wave at Manuel Antonio's surf competition.

Photo courtesy of Philippe Demarsan

A week since returning to Costa Rica as the Central American surfing champion, Jason Torres captured another title over the weekend, winning the first-ever SOL Surf competition. The contest took place at Playa Espadilla in Manuel Antonio, near the national park of the same name on the central Pacific coast.

In the finals, Torres trailed Luis Vindas most of the heat, but in the final minute, both surfers caught the final wave, with Torres going left, and Vindas right.

On that wave, Torres scored high enough to pass Vindas and win the championship.

Torres won $1,500 for his first place finish and was awarded a $200 gift certificate at Olas surf shop in Quepos.

His victory in the SOL Surf contest comes only a week after Torres won his second Central American championship in El Salvador. In the World Surfing Games in August in Jacó, Torres finished seventh overall.

“This was an incredible finale,” Torres said after leaving the water. “I couldn't let me guard down for one second.”

Vindas, who is a teammate of Torres on the Costa Rican national surfing team, took home $500 for his second place finish.

On the women's side, Nataly Bernold finished first, winning $500, while teammate Lisbeth Vindas came in second, earning $250.

Costa Rica card players, get ready to place your bets. The PokerStars Latin American Poker Tour is heading to Playa Conchal, on the northern Pacific coast, from Nov. 19 to 22.

Now in its third edition, the tour will feature five events. The kick-off, with a buy-in of $2,500, will take place at the Paradisus Playa Conchal resort.

“In just two seasons, the Latin American Poker Tour has become the biggest poker tour in the region,” said Costa Rican PokerStars pro Humberto Brenes.

“Last season, the prize pool hit a million dollars in Costa Rica and I know we're going to beat that this time,” he said. “I am very proud to play in Costa Rica – it's my home country and a very special event for me.”

The tour has added several new locations, including The Bahamas and Viña del Mar, Argentina.