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(506) 2223-1327           Published Tuesday, Oct. 4, 2011, in Vol. 11, No. 196          Email us
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Embattled wait staffs want extra tips off the books
By the A.M. Costa Rica staff

Waiters and bartenders, unhappy that tips are now considered salary, are taking action to keep some money off the books. In some downtown restaurants, waiters and waitresses tell patrons to pay additional tips in cash instead of including a gratuity with the price of a meal on a credit card slip.

If the money does not run through a credit card provider, Costa Rica's tax authorities will have no way to track down the payment, they reason.

The effort at blatant tax evasion comes after a protest Thursday at the building housing the Corte Suprema de Justicia. Court magistrates have determined that tips were salary, ending 40 years of untaxed income for the waiters and others who work in eating establishments.

Cash tips are not unusual, both in restaurants and in other occupations. For example, hotel workers almost always get cash tips, as do porters who load luggage into taxis at Juan Santamaría airport. But restaurant workers get most of their tips on the books. Restaurant operators are obligated to add 13 percent of the cost of a meal as sales tax and also 10 percent as a mandatory tip. The remainder that diners may leave behind in cash can be around 5 percent. But many Costa Ricans and long-time residents leave no extra money as tips. They reason that the tip already has been paid with the price of the meal.

Calling tips salary has other consequences. If a waiter earns more than 660,000 colons a month,  about $1,300, the employer is obligated to withhold some salary and turn it over to tax
cash is king

authorities. In addition, waiters and others affected by the ruling also have to surrender 9 percent of their salary to the Caja Costarricense de Seguro Social. And the employers also have to pay at least 13 percent more. So the more an employee earns on the books, the more money has to be remitted to pay for social security charges.

And then the insurance policies that cover the workers on the job also are keyed to monthly salaries.

So the more money that is considered salary, the more the employee and the employer has to pay.

That is why many in the tourism business oppose the tips-as-salary ruling, too.

The Sala IV is studying several appeals to its ruling and may go back on its ruling.

Until then, food service workers will be doing their best to evade taxes on any cash tips.

Exit tax increased $2 for international air passengers
By the A.M. Costa Rica staff

As of Saturday, the fee to leave Costa Rica by air increased $2. The government says it is collecting a fee in addition to the $26 exit tax to pay for luggage inspection for plants and insects.

The inspection includes scanning with an x-ray machine.

The decree that instituted the policy also said that the $2 fee would be charged for persons entering the country at airports. Those entering now as
 tourists have to pay a $15 arrival tax, so adding an additional $2 would not be difficult, although it is unclear if the new amount is being charged on arrival.

The new fees are based on a presidential decree published in February.

The measure also assesses fees for bulk imports like shiploads of rice or containers of plant products.

There was no explanation why persons entering the country by land are exempt from the tax.

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Status of world economy
causing concerns here

By the A.M. Costa Rica staff
and wire services reports

Some Costa Rican business leaders and employers are nervous over the possibility of another financial crisis in the United States and Europe.

Among these are officials of the Cámara Costarricense de la Construcción.  Ricardo Castro, president of the organization, told a group that the purpose of financial resources is to be a means of production and for the welfare of the people, not as an end or instrument to generate riches in itself.

He said he hoped that the international crises would help reduce the cost of prime materials that would allow Costa Ricans to improve the infrastructure and its competitivity.

He also estimated that the proposed 14 percent value-added tax now in the legislature would increase the cost of a home from 9 to 12 percent. He said the impact of the proposed tax plan was a great concern for the country.

Meanwhile Aldesa, the financial services firm, issued a report that said that a new wave of international problems would affect the real estate market here as well as the country's ability to borrow money. It warned that uncertainty and a deterioration of the government's finances would generate a process of dollarization in Costa Rica.

Monday U.S. stocks followed European and Asian markets into the red after Greece announced it will miss deficit reduction targets worked out in a bailout deal with lenders.  Despite a series of austerity measures, the Greek government projects its deficit at 8.5 percent of the country's economic output, well above the 7.6 percent target it had promised international creditors. The admission renews fears that Greece may not get the crucial assistance it needs to avoid default.

The possibility that Greece will not make good on its debts moved a step closer to reality on Monday.  At a eurozone finance ministers meeting in Luxembourg, EU Monetary Affairs Commissioner Olli Rehn said Greece and the 17 nations that use the euro have reached a critical juncture.

"It seems that Greece is likely to miss the target this year, next year and concrete measures agreed to so far are going a long way to meet all the fiscal targets," said Rehn. "As I said, it is essential now that we will assess the measures, we will review the figures."

Greece's next bailout installment — about $11 billion — is predicated on the country's ability to reduce spending — spending that has raised the country's debt load to a staggering 173 percent of national income.  Without the next installment, Greece is expected to run out of money in a matter of weeks. 

Contaminated water seen
as cause of Heredia illnesses

By the A.M. Costa Rica staff

Some 200 residents of Santo Domingo de Heredia went to the municipal council meeting Monday night with petitions seeking a declaration of emergency over contaminated water. They want tanker trucks sent in with drinkable water, according to the Comité Bandera Azul Ecológica de San Miguel.

For 10 days the families, mainly in Tunes, Paracito, San Miguel, San Luis and Pará, have had discolored water that has been tested and shows fecal contamination. Residents have been getting sick and blame the water.

Personnel from the Ministerio de Salud have been in the area monitoring the ill individuals for two days, said the committee.

The Comité Bandera Azul Ecológica said that it has observed  Río Agrá en Moravia and said that the ground water was contaminated with agricultural runoff.

Find out what the papers
said today in Spanish

By the A.M. Costa Rica staff

Here is the section where you can scan short summaries from the Spanish-language press. If you want to know more, just click on a link and you will see and longer summary and have the opportunity to read the entire news story on the page of the Spanish-language newspaper but translated into English.

Translations may be a bit rough, but software is improving every day.

When you see the Summary in English of news stories not covered today by A.M. Costa Rica, you will have a chance to comment.

This is a new service of A.M. Costa Rica called Costa Rica Report. Editor is Daniel Woodall, and you can contact him HERE!
From the Costa Rican press
News items posted Monday through Friday by 8 a.m.
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San José, Costa Rica, Tuesday, Oct. 4, 2011, Vol. 11, No. 196

Special commission urged Caja to tighten belt, freeze jobs
By the A.M. Costa Rica staff

The ailing Caja Costarricense de Seguro Social needs a new board of directors and should clamp a lid on hiring, according to a committee set up to study the nation's medical service provider.

The committee also said Monday in its report that the Caja can be salvaged without raising the amount of money employers and employees have to pay as social charges each month. However, it also suggested that the legal foreign residents in Costa Rica as rentistas be assessed a monthly amount based on a monthly income of $2,500.

The Caja runs the nation's public hospitals and the many local clinics. However, it is facing hard financial times, in part because government agencies have not paid all the money they owe. The Caja also appears to be losing money on questionable disability claims by its employees and improper handling of its supplies. Many supplies and medicines end up being incinerated because they have expired or suffered problems from heat or water damage.

The Caja also was the victim of a $32 million purchase of unneeded medical equipment. That case resulted in the conviction of former president Rafael Ángel Calderón Fournier. But neither Calderón nor others convicted with him went to jail because the Sala III high criminal court reduced their sentences.

The commission report Monday includes the suggestion of replacing the entire board of directors of the Caja with persons skilled in business and the law. The report also said that a sharper eye should be kept on salary expenses and that collection of money owed by employers should be stepped up.

The four-person commission provided a list of 81 recommendations. Among them is a suggestion that the central government and the Caja come to terms on payment of the outstanding debt and arrange a payment plan.

The report also said that hiring should be frozen as of Oct. 1 for a period that continues through 2012. After that employment should increase no more than 1 percent, it said.
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The report also said that all purchases should be publicized through the Gobierno Digital system on the internet.

The commission also suggested migrating the Caja's computer systems to free software over the next two years and to create positions of general manager at each hospital using people who were not physicians. It also urged speeding up the use of electronic appointments for patients using the Caja system.

Most foreign residents who are here legally are required to affiliate with the Caja now whether or not they use its medical services.

The recommendation about rentista residents appears to be directed at those who declare income lower than that required to maintain that immigration status or those who participate in group plans where their payment is not based on their monthly income. Rentistas now have to show an income of at least $2,000 a month in order to earn residency through the Direccion General de Migración y Extranjería.

The bulk of the expats who sign up with the Caja do so as an asegurado voluntario because they are not otherwise employed here. The signup process is supposed to include questions about monthly income, so many foreigners already are probably paying an amount based on an income of from $2,000 to $2,500. The rate appears to be around 10 percent.

The commission also may have included pensionados when it used the term rentista. Pensionado income is at least $2,000 a month for those who recently acquired the status. Long-time pensionados and rentistas are held to lower monthly incomes.

The commission members were economists Fernando Naranjo Villalobos and Pablo Sauma Fiatt, businessman Rafael Carillo Lara and sociologist Juliana Martínez Franzoni.

The thrust of the report seemed very much like an assessment of a business in financial trouble with many of the same recommendations, including trimming the central office workforce.

Ms. Chinchilla weighs in on $600 speeding violations
By the A.M. Costa Rica staff

President Laura Chinchilla asked traffic officials Monday to institute a system of rational traffic fines that relate to the socioeconomic condition of the country. The president made the request when she met with Francisco Jiménez, minister of Obras Públicas y Transportes, Silvia Bolaños, director of Consejo de Seguridad Vial, and others at the president's home in the mountains above Santa Ana.

The president is recovering from minor surgery Friday.

Casa Presidencial gave a summary of the meeting.  The government intends to expand the system of automatic cameras on the highways, the summary said. In the first four months of 2012, cameras will be installed on Ruta 32, Ruta 27, the Interamericana Sur, the Bernardo Soto highway and several other points in the country.

Ms. Chinchilla asked that cameras be installed near certain elementary and high schools by the start of the next term in February.

The system began issuing fines automatically, and motorists had to consult a list to see if they had been ticketed. There have been appeals to the Sala IV constitutional court saying that the $600 speeding fine is disproportionate.
The Spanish-language press has been filled with stories of motorists who accumulated six or eight tickets in just a few weeks. If motorists do not pay, they will have to pay when they renew the marchamo at the end of the year.

Casa Presidencial did not say how much of a fine the president thought was appropriate.

The Casa Presidencial summary was upbeat. It said that daily traffic fines have been reduced from 2,602 at the beginning of September to 350 violations a day at the end of the month. The summary also reported that traffic officials said that accidents decreased from the 4,700 reported in the month of May to the September figure of 3,100.

Other changes were listed as improving the signage leading up to the traffic cameras, the creation of an informational campaign, improving the way violations are handled, perhaps with the use of banks as payment centers. The meeting also discussed studying the speed limits.

The cameras are mainly set up in stretches where the speed limit is 60 kph or about 37 mph. Highways like the General Cañas from San José to Alajuela also have sections where the speed limit is 90 kph or about 56 mph.  Sometimes it is not clear where the transition takes place.

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San José, Costa Rica, Tuesday, Oct. 4, 2011, Vol. 11, No. 196

School director, cop's daughter, 13, among murder victims
By the A.M. Costa Rica staff

Among the murders and violence over the weekend two cases stand out.

In La Rita de Pococí de Limón police located the tortured and bullet-riddled body of the school director in Línea Vieja en Guácimo. They are not sure if he is just another robbery victim or if he was punished for expelling a student who was selling drugs in the school. The man Kenneth Panagua Soto had been on the job eight months and had complained at a meeting of parents that he was being threatened with death.

Whoever killed him also took his vehicle
Meanwhile in Carmen de Upala police found the missing daughter of the deputy chief of the cantón de Guatuso. The girl, 13, had been missing since Saturday, according to police officials. The Judicial Investigating Organization said the girl, identified by the last name of Araya, left her home on a household errand and vanished.

Police detained a suspect, according to Allan Obando, director of the frontier police in the northern zone.

In another weekend case, a gunman opened up on three visitors to the El Pueblo commercial center in Calle Blanco which contains dance locations and bars. One man died and two more were injured. The location is in north San José.

Ms. Figueres asks governments to scale up climate efforts
Special to A.M. Costa Rica

The United Nations climate change chief, a Costa Rican, Monday called on governments taking part in negotiations this week to urgently scale up their efforts to combat the problem ahead of a U.N.-led conference on the issue starting next month in Durban, South Africa.

The preparatory negotiations, which started Monday in Panamá City, are the last formal negotiations before world leaders meet in Durban to discuss ways to implement existing climate change agreements such as the Kyoto Protocol and the Cancún Agreements.

“During this year, governments have been steadily building the pillars that will support the next chapter of the global climate regime,” said Christiana Figueres, executive secretary of the United Nations Framework Convention on Climate Change.

“They have recognized very clearly that the current level of effort is not enough, and they have realized that it is important to increase both the level of emission controls on greenhouse gases as well as the capacity of countries to adapt to climate change.”

Ms. Figueres said the Panamá negotiations will provide member states with the chance to work on their proposals and focus on key issues to be resolved ahead of Durban.

“Governments know that the best way to have a successful Durban is to arrive there with draft decision texts, and I see a lot of support for that approach. They can leave Panamá with a
clearer idea of what they would be able to agree in Durban,” she said.

Ms. Figueres said she expected governments at the Panamá negotiations to focus their attention on their agreement to strengthen the systems that measure, report and verify the efforts of all countries to ensure international accountability and transparency on climate change. She also noted that countries would need to attend to issues that were left unresolved in last year’s climate change conference in Cancún, Mexico, particularly the questions of the future of the Kyoto Protocol and the broader climate change regime.

“Governments can decide what they want to do over the future of the Kyoto Protocol and, in particular, how they would like to address the protocol’s second commitment period. This would involve the question of deeper emission reduction commitments of industrial countries under the Kyoto Protocol and the question of how to go forward with the current emission pledges of the U.S. and developing countries which are currently not under the protocol,” she said.

The Kyoto Protocol has been ratified by 192 of the 195 framework parties. Under the Protocol, 37 states, consisting of highly industrialized countries and countries transitioning to a market economy, have legally binding emission limitation and reduction commitments.

“As a bridge between two oceans and two continents, Panamá is a good place to identify where governments positions connect in order to advance towards Durban on a firm footing,” Ms. Figueres said.

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San José, Costa Rica, Tuesday, Oct. 4, 2011, Vol. 11, No. 196

Medical vacations in Costa Rica

More killings in México
seen as part of drug war

By the A.M. Costa Rica wire services

Police in Mexico's Guerrero state say they have found seven bullet-riddled bodies in the resort town of Zihuatenejo. 

Guerrero state police say the victims were found Sunday.

A local newspaper has published a photograph of the bodies, showing messages lying near the half-naked and bloodied victims whose feet were tied to a street pole.  The messages claimed to be from the Knights Templar, an offshoot of the La Familia drug gang.

Elsewhere in Mexico Sunday, gunmen opened fire on a vehicle in Mazatlan, in Sinaloa state, killing three men and two women. Sinaloa is home to El Chapo's People, a drug cartel headed by one of Mexico's most wanted men, Joaquin Guzman.

Mexican President Felipe Calderon began a crackdown on illegal drug activity in 2006.  More than 40,000 people have been killed in the resulting Mexican drug wars.

New telescope in Chile
built in Atacama desert

By the A.M. Costa Rica wire services

A powerful new radio telescope has begun probing the depths of outer space from the Atacama desert in northern Chile.

The telescope, called the Atacama Large Millimeter/Sub-Millimeter Array, began operating Monday after years of planning and construction. The telescope is using 16 large antennas to see wavelengths of light that are much longer than what the human eye can see. Eventually it will use 66 antennas.

Scientists like the desert location because the instrument is set up in an area that is extremely dry and is at an altitude of 5,000 meters.  That is about 16,400 feet.

The researchers are hoping the telescope will yield new clues about the coldest and darkest regions of space, and provide information about the formation of stars and planets in galaxies.

Jamaican leader disclosed
he's quitting over extradition

By the A.M. Costa Rica wire services

Jamaica's outgoing leader said Sunday that public perceptions about his handling of a U.S. extradition request for a notorious drug gang leader contributed to his recent decision to step down.

Prime Minister Bruce Golding said in a nationally televised address that questions about the role he played in the extradition of Christopher "Dudus" Coke had affected him deeply.

Sunday's address was the first time since Golding's unexpected announcement last week about stepping down that he has given a specific reason for the move.

The prime minister said his opposition to the U.S. extradition request for Coke was because the U.S. indictment relied on illegal wiretap evidence. Golding is reported to have engaged the services of a U.S.-based law firm to lobby Washington to drop the request.

Golding said the Coke extradition saga was a breach of Jamaica's Constitution.  He said if the case had involved anyone other than Coke, the matter would probably not have evolved into the cause celebre that it became.

When the Jamaican government finally bowed to U.S. pressure to move against Coke in May 2010, more than 70 people were killed in gun battles pitting the police and military against Coke loyalists holed up in the Tivoli Gardens district of the capital.

Golding is to step down after the ruling Jamaica Labor party picks a new leader at its annual conference in November.

U.S. Supreme Court facing
many high-profile cases

By the A.M. Costa Rica wire services

The U.S. Supreme Court opened its annual term Monday, and legal analysts say the court is likely to rule on some high-profile domestic issues in the months ahead that could have an impact on next year’s presidential election.

Legal experts say it is likely the nine-member Supreme Court will take up the question of whether President Barack Obama’s signature health care reform is constitutional. Obama administration officials recently asked that the high court take up the health care law, which already faces several challenges from individuals and states in the lower courts.

At the heart of the issue is whether a mandate in the law requiring Americans to buy health insurance is permissible under the U.S. Constitution.

The controversial health care law continues to be a main point of attack for the Republican presidential candidates and a high court decision by next June could have a political impact on next year’s U.S. presidential election.

Texas Gov. Rick Perry, a presidential contender, promised to strike down the health care law during a campaign appearance in New Hampshire. “On my first day in office I will pull out probably a Sharpie, and I will put my signature to an executive order to wipe out as much of Obama-care as I can using that technique,” said Perry.

Analysts say it is hard to predict how the high court would rule on the conservative challenge to the health care law.

In addition to the health care law, the Supreme Court also could take up a controversial immigration law in Arizona that allows police officers to check immigration papers of people they suspect may be in the country illegally. The Obama administration opposes the law and says it could lead to racial profiling.

The high court also is expected to consider various cases involving privacy rights, as well as the power of the federal government to regulate offensive content on television.

The court remains ideologically split with four justices regularly voting as a conservative bloc and four others generally making up a liberal faction. Justice Anthony Kennedy is seen as a moderate or swing vote, who often casts the deciding vote in cases that split the court along liberal and conservative lines.
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San José, Costa Rica, Tuesday, Oct. 4, 2011, Vol. 11, No. 196

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Saprissa soccer fans tangle
with police in Limón

By the A.M. Costa Rica staff

Fuerza Pública officers faced off again against soccer fans Sunday in Limón. Police said they confiscated three firearms and a knife as well as a considerable quantity of glass bottles, rocks and some drugs.

Some 22 fans were detained to face allegations of blocking the public right-of-way and firing guns in populated areas.

One police officer was hit in the head with a rock.

The fans were mostly followers of the Saprissa soccer team that won its contest against Limón Sunday. The fans managed to block for a time Ruta 32, the highway that linked Limón to Guåpiles and eventually San José.

Prosecutors in Nicoya get
a dose of water and mud

By the A.M. Costa Rica staff

Weekend rains took their toll but the accumulation of rain was highly variable.

The town of Nicoya on the peninsula of the same name received a heavy dose. The Poder Judicial said the prosecutor's office there suffered water and mud damage. It was closed Monday except for emergencies.

The Poder Judicial said that most prosecutors were not in the office. They were in various courts working on cases. The agency said the office was expected to be open today after it was cleaned.

Quadracycle driver dies

By the A.M. Costa Rica staff

A 20-year-old man died Sunday afternoon when the quadracycle he was driving crashed into a pole.

The mishap took place in La Esperanza de Garza in Nicoya, Guanacaste. The man, identified by the last name of Fuentes, was believed to be from San José but was visiting the Pacific coast with his family, said the Judicial Investigating Organization.

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