A presidential panel has set up a complex plan to end deficit spending by the end of 2006.

To accomplish this goal, the panel recommends taxing income from outside Costa Rica, tightening up, simplify and make more equal the tax collection system and cracking down on tax evaders.

Tax income has been more or less stable since 1995, said the panel. That has amounted to from 12 to 13 percent of Costa Rica’s gross national product. "This level of income, however, has been inefficient to cover the total government expenditures, and this level is significantly much lower than the average" for similar countries, said the report issued by the panel.

The panel, composed of former ministers and headed by the current minister of the hacienda, Alberto Dent, has these other recommendations:
 

• eliminate laws that force the government to spend a certain amount of money for certain causes, thereby providing more flexibility;

• tighten controls on spending, eliminate excessive spending and provide more openness to the public;

• make the national budget a legitimate document that clearly reflects expected costs; 

• create a system to keep the legislature from increasing expenses to favor special interests;

• create a commission to coordinate all the agencies of government and to make sure they are continuing to do what they were supposed to do when created;

• write into any legislation creating new government agencies a "sunset" provision that automatically eliminates the agency at a certain date unless specifically reauthorized;

• transfer more power to the municipalities where the work will be done more efficiently;

• reform civil service so public employees could be fired easier;

• create incentives for public employees so they get raises based on performance rather than automatically;

• create one basic system of national pensions;

• Double the property tax on vehicles and boats; 

• set up a system to begin imposing tax on companies now located in the tax-free zones so that they will be paying a full tax by 2008.

• eliminate the geographical distortions in the tax law by voiding such free zones as that in Golfito.

• impose an annual minimum $200 tax on sociedades anónimas, the Costa Rican version of corporations.

• create a super tax-collecting agency that would oversee all the collecting activities of other government agencies. This would be "Agencia Nacional de Recaudación Tributaria."

What the government paid in interest in 2001 was about 84 percent of what it spent on education, seven times what it spent on security and nine times the amount allocated to health, said the panel.

At the end of 2001 the combined national debt was 2.1 trillion colons or about $6 billion, said the report. The deficit is a result of public finances during the last decades, said the report, calling the problem "an accumulation of an old problem." 

Income taxes bring in from 25 to 27.6 percent of the government’s income. Sales tax and consumption tax bring in about 50 percent, according to the report. A lot of nuisance taxes cost more to collect than they bring in, so the commission suggested eliminating these.

The commission noted that the current income tax setup gives favorable treatment to income coming from some sources and not from others. It suggests levying the same tax no matter what the source. It proposed a "global and unitary tax."

This global tax would make no difference in the origins or destinations of the tax nor for the type of taxpayer. Costa Rica does not now impose taxes on money earned outside the national territory

"The tax ought to have a universal or world base, that is, it ought to apply to all the income without regard to the territory where it was generated," said the report. To do this, the country must, among other things adopt a network to exchange information about income with other countries, said the report.

The country also must adopt unilateral or bilateral conventions or agreements to avoid double taxation of income earned elsewhere.

The commission also said that the country’s value added tax of 13 percent should be changed to apply to consultancies and professional services.

The commission said that geographical "distortions," such as the free depot of Golfito were set up to solve social problems, but that this was an inappropriate approach.  The lack of transparency and corruption has developed a system that causes Costa Ricans to bear unnecessarily high taxes for goods that should be accessible for all.

The commission predicted that if its recommendations were enacted into law, by 2008 government income would be about 16.2 percent of the gross national product, up about 3 percent from 2001. External debt would be cut in half. The deficit would be eliminated.

The commission makes no apparent provision for increases in the world interest rates on which external debt is based. Current interest rates are the lowest in 40 years.

The bipartisan commission said that the adoption of these reforms will not be easy but that without them the economy of the country would suffer a serious deterioration in a short time. 

A series of reports based on new maps covering nearly half the world's forests warns that unsustainable development practices are responsible for the degradation of vast areas of wooded land.

The World Resources Institute's Global Forest Watch released reports covering Chile, Venezuela, Indonesia and North America, and the first detailed atlas of the forests of Russia. The institute is an environmental research and analysis organization based in Washington, D.C.

The reports, which took more than two years to produce, include maps created through a combination of on-the-ground knowledge and satellite data, and provide accurate forest information to anyone with access to the Internet.

Institute President Jonathan Lash said the data show that much of what was thought to be vast, untouched stretches of intact forests in the world are already crisscrossed by roads, mining and logging concessions.

For example, the Russian taiga, stretching in a long band across the country's northern latitudes, has long been viewed as an expanse of wilderness protected from human encroachment. But the new atlas of Russia's forests indicates that the taiga now consists of fragments of wilderness, separated by logged and otherwise degraded forests.

In North America, less than half of the region's forests and woodlands are in tracts of land at least 200 square kilometers in size, and more than 90 percent of these are found in Alaska and Canada.

The reports note that while many countries have taken great strides in enacting laws to protect their forests, in many places regulations are simply not enforced.

More detailed information of the reports and maps can be found at: http://www.globalforestwatch.org/
english/index.htm
 

Blair backs action
against Saddam

LONDON, England — British Prime Minister Tony Blair has sent his strongest signal yet that he would back U.S. military action against Iraqi President Saddam Hussein. 

Blair says the fight against terrorism should involve military action if necessary, and should include ousting regimes if justified. 

He says there should be no let up in efforts to rid the world of terrorism and weapons of mass destruction. Blair says the Iraqi regime is "detestable and brutal." He added that President Saddam should allow international weapons inspectors unlimited access to suspected Iraqi weapons facilities or face the consequences. 

Blair spoke in Texas Sunday shortly after wrapping up a three-day visit to President Bush's ranch, where the two leaders agreed that all options are under consideration for dealing with Baghdad. 

In Baghdad, President Saddam vowed to confront any U.S. military action with all possible means. Iraqi state-run media quoted him as saying Iraq will fight the U.S. with "missiles, warplanes, marsh reeds, and even stones." 

Sunday, U.S. Secretary of State Colin Powell says there currently are no plans to launch an attack on the Iraqi leader. Powell says the escalation of violence between Israel and the Palestinians is complicating the consideration of options against Iraq.

Much of world
springing ahead

Most of the United States returned to daylight saving time early Sunday That means Americans in most of the country skip an hour as their clocks move forward. 

New York time is now two hours later than the time in Costa Rica. The time in Los Angeles, California, is an hour earlier.

The change is designed to save energy and make better use of daylight. The idea was conceived by Benjamin Franklin during a trip as an American delegate in Paris in 1784, in an essay called "An Economical Project." 

Some areas in the United States do not observe the change, including the states of Arizona and Hawaii, the territory of Puerto Rico and parts of Indiana. 

Meanwhile, clocks in Pakistan are also moving forward by one hour Sunday, making the country the first in South Asia to observe daylight saving time. Pakistan's government says the move is an experiment and will be adopted annually if liked by the population. 

Parts of Canada, Cuba and Mexico also moved their clocks forward this weekend for the summer. Europe and parts of the Middle East have already made the seasonal time change. The practice is less common in Asia and Africa.

Venezuelan President Hugo Chavez has dismissed seven executives of the state oil company who were seen as ringleaders of escalating labor protest. 

Appearing on his weekly radio show Sunday, Chavez warned there might be more firings.  His announcement was in response to a month-long strike at the state-owned monopoly, Petroleos de Venezuela. 

President Chavez said 12 other executives have been sent into early retirement.  The Venezuelan leader says he considers the protesters' attempts to disrupt the strategic oil industry as "subversive actions close to terrorism." 

The dissident executives and employees are demanding the resignation of a new management board appointed by Mr. Chavez.
 

Parliament dissolved
in Trinidad & Tobago

PORT OF SPAIN, Trinidad — Trinidad and Tobago's Prime Minister Patrick Manning has dissolved parliament after failing to elect a speaker for the national assembly. 

The action was taken late Saturday after the island nation's two main political parties, the United National Congress and the rival People's National Movement, failed to select a speaker. 

The two parties met Friday to nominate candidates for the position. But neither side has been able to agree on a candidate. This latest crisis comes nearly four months after the Dec. 10 election in which both parties each won 18 seats in the 36-member chamber. 
 

Car bomb blasts
town near Bogota

BOGOTA, Colombia — A powerful car bomb has exploded in Colombia, killing at least 12 people and injuring more than 50 others.  Police say the blast went off early Sunday in the city of Villavicencio, which is located about 75 kilometers southeast of here. 

Authorities say the bombing occurred in a popular area where hundreds of people were at restaurants and nightclubs. Hospitals in the city are overflowing with injured people and health services have made an urgent plea for blood donors. 

No one has claimed responsibility for the bombing, which damaged several buildings, including a radio station and shops. Police suspect the country's main rebel group, the Revolutionary Armed Forces of Colombia (FARC) was behind the blast. 

The guerrillas have attacked Villavicencio and nearby areas repeatedly in recent months. Currently, Villavicencio is playing host to the Davis Cup tennis tournament between Colombia and Uruguay. 

Colombia is the scene of a longstanding conflict pitting leftist rebels against government troops and right-wing paramilitary forces.

Meanwhile, Colombian leftist rebels have shot and killed a kidnapped policeman whose terminally ill son died last year after making an unanswered plea to see his father before he died. 

Police say rebels of the Revolutionary Armed Forces of Colombia gunned down Norberto Perez and another captive police officer as they apparently tried to escape from their jungle prison somewhere in western Colombia. 

The guerrillas had held Perez captive for more than two years. They delivered his body and that of the other slain officer late Friday to Red Cross officials in Antioquia Department (northwest of here).

Perez's 12-year-old son, Andres, died in December of cancer. The boy's heart-wrenching televised plea to the rebels prompted offers from several prominent Colombians to switch places with the father. It is not known whether Perez knew of his son's death. 

The rebel group, known as FARC, is holding captive scores of Colombian security force members. It uses money gained from ransoms to finance its nearly four decade old war against the government. Slow-moving peace talks between FARC and the government collapsed in late February resulting in an escalation in rebel attacks throughout the country. 

 U.S. remembers prisoners of war

WASHINGTON, D.C. — President Bush observed National Former Prisoner of War Recognition Day by issuing the annual proclamation and noting that "this year, as we remember our former prisoners of war, we also mark the anniversary of the Bataan Death March" of World War II. On this day, he said, "we recognize the sacrifice of POWs and remember with honor their heroism."