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Tuesday, March 28, 2023

Costa Rica on EU tax blacklist due to past gov’t negligence – Chaves

The European Union published last Tuesday the updated list of countries it considers “tax havens,” and Costa Rica was included. Given this situation, the President of Costa Rica referred to the issue during Wednesday’s press conference.

Rodrigo Chaves described Alvarado’s administration as “negligent and irresponsible” and even suggested the previous government acted in “bad faith.”

Chaves directly questioned former Finance Minister Elian Villegas, who, on April 8, two days before the second round of elections and one month before the end of President Carlos Alvarado’s term, sent a letter to the European Union assuming commitments.

According to the head of state, this letter is “a promise from a minister in the twilight of his administration, making commitments as to what the new government and the new Congress were going to do.”

Nogui Acosta, Minister of Finance, also questioned the previous management of the Treasury and the handling of this issue, seconding Chaves’ assertions.

“The previous government was committed to radically changing the tax system. I could never promise it would happen in three months,” added Acosta.

The president affirmed that the EU is “serious” and considered the letter, which he described as “irresponsible,” a state commitment.

According to the Reuters report on Costa Rica’s recategorization, countries on the list may suffer reputational damage, increased scrutiny of their financial transactions, and the risk of losing EU funds.

Meanwhile, Costa Rican political parties demand further explanations from the current government. The Partido Unidad Social Cristiana pointed out that “it is unacceptable that the government should now try to evade its responsibility and put foreign investment, legal security, and the country’s good image at risk.”

The party also stated they “support the path of fiscal transparency, without it meaning the approval of new taxes and greater burdens to the Costa Rican productive sector.” EliĆ©cer Feinzaig, PLP Congressman, opposed the implementation of global income in the country, suggesting a possible refusal of his party to support such a bill.

The possibility of a reform to introduce the global income tax in Costa Rica will have a steep road in the Legislative Assembly. For the time being, it is expected that the governing party will present a bill to be discussed soon by the deputies.

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