The Legislative Assembly in Costa Rica approved this Friday in first debate the Law to Strengthen the Public Finances, better know as Fiscal Plan, with a total of 35 votes in favor (22 against).

Among the 22 members of congress that voted against the plan were the 14 representatives of the National Restoration Party, 2 of the National Liberation Party, 1 of Frente Amplio, 3 of the National Integration Party, 1 of the Social Christian Union and 1 of the Social Christian Republican Party.

The fiscal plan was negotiated following fast process and seeks to reactivate the economy and generate fresh resources.

Now the fiscal plan must be approved in second debate, but first it is sent to consultation to several public institutions and it is likely that it is also sent first to be reviewed by the Constitutional Chamber (this requires the support of a number of deputies), “It’s another step in the consolidation of the public finances (…) now the text goes to consultation to the Constitutional Chamber, that acts like a Senate. We hope it understands the necessity of getting this plan approved”, stated Rocío Aguilar, Minister of Treasury.

“Not all the income contained in this fiscal plan will be collected immediately, it will be a while before  the VAT goes into effect, but what will be coming in immediately are the funds collected by amnesty (companies that owe large sums will get the interests  and fines partially forgiven as long as they pay the main debt), and this plan also gives back trust, it helps the country demonstrate that it has the capacity through these measures plus the rest of the measures coming, it will have an impact in the interest rates in the financing we can gain access to. It will also generate the necessary climate for reactivation, there are projects right now on hold, waiting to see what is going to happen with the economy before continuing with investments”, explained Aguilar.

The discussion of this fiscal plan is being protested by labor unions in an ongoing strike that began September 10 and has already generated billions in losses.

Labor unions expect the fiscal plan to be rejected by the Constitutional Chamber, and according to one of the main leaders, Albino Vargas, the strike will continue.