Tuesday 03 April 2012
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Costa Rica's Finance Minister Resigns Over Tax Scandal

The ministro de Hacienda, Fernando Herrero, tendered his resignation on Monday after the questioning he faced for not updating two undervalued properties for twelve years.


The undervaluation allowed the Finance minister to save more than ˘300.000 colones a year on income taxes, according to a report by La Nacion last week.

"I will not let my name be used to block the major (tax) changes we dream", said the Herrero in his letter to presidenta Laura Chinchilla, in reference to the Plan Fiscal.

At the United Nations headquarters in New York, presidenta Laura Chinchilla told the press that Herrero's decision demonstrates his commitment with the tax reforms promoted by the government.

The presidenta over the weekend had discarded the firing of Herrero, saying he was "unwilling to let go of a key minister" in the first against tax evasion.

The Finance post will be assumed temporarily by Costa Rica's vice-president Luis Liberman.

The president of the Legislative Assembly, Luis Carlos Mendoza, by way of the social media said "Herrero's resignation was necessary, but later. Public officials and government leaders must lead by example. Herrero was a bad example".

The president of the Partido Liberacion Nacional (PLN) - ruling party, Bernal Jimenez, said "there was no fraud, only a moral issue".

Last week the La Nacion revealed that Herrero and other government officials for many years had declared less income tax due to the undervaluation of properties. Herrero defended himself on national television by blaming the municipalities for not updating the value of the properties.

Presidenta Chinchilla over the weekend acknowledged that the Herrero situation compromised the government's efforts to push through tax reforms that were recently approved in first vote in the legislature and is currently under review by the Constitutional Court.

Among the changes in the reforms are the introduction of a 14% value added tax on goods and services, replacing the existing 13% sales tax on goods and the starting in 2015 the taxation of companies operating in free trade zones.

Florisabel Rodriguez, the wife of former Finance minister Herrero, also resigned her post as communications advisor to presidenta Laura Chinchilla. She and Herrero owned jointly the under valued properties.




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