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Modification of the Tax Simplification and Efficiency Law

Modification of the Tax Simplification and Efficiency Law

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1. Background

This bill begins by pointing out the recent allegations related to the so-called “La Cochinilla” case. It has revealed, among other very serious situations, the existence of failures, inconsistencies, and administrative omissions in the management of road infrastructure projects, which has a direct impact on the quality of the works and affects the final costs to be borne by the Costa Rican State.

Among others, one of these gaps or omissions is the total lack of obligation on the part of the Administration (MOPT (Ministerio de Obras Públicas y Transporte or Public Works and Transportation Ministry), CONAVI (Consejo Nacional de Viabilidad or National Viability Council), Municipalities) to comply with the reports or technical audits carried out by the Laboratorio Nacional de Materiales y Modelos Estructurales de la Universidad de Costa Rica – LANAMME (National Laboratory of Materials and Structural Models of the University of Costa Rica).

This is a serious problem for the proper evaluation and supervision of road infrastructure projects. It is also a contradiction that LANAMME’s professional, technical, and specialized criteria lack any force to be imposed on the active administration.

Now, by means of Law No. 8114, Tax Simplification and Efficiency Law, resources were assigned to guarantee the “maximum efficiency of the public investment for the reconstruction and optimal conservation of the Costa Rican road network”. According to Article 5 of the law, 29% of the annual product from the collection of the single tax on fuels will be allocated to the National Viability Council (CONAVI) and 1% to the University of Costa Rica.

This 1% shall be transferred directly by the National Treasury to the UCR, which will administer it under the budgetary modality of restricted funds in force in that university entity through its National Laboratory of Materials and Structural Models, ensuring these resources are applied to guarantee the quality of the Costa Rican road network under the functions detailed in Article 6 of Law No. 8114.

In this sense, due to the series of contingencies that have been arising, the Legislative Branch issues this bill.

2. Modification Proposal

Article 6 of the Tax Simplification and Efficiency Law – Law No. 8114 is amended regarding Taxation to guarantee the quality of the national and cantonal road network.

The University of Costa Rica, through LANAMME, is responsible for carrying out the following tasks to achieve efficiency in public investment in the area of roads:

  1. Training and accreditation programs for laboratory technicians.
  2. Technical audits of projects under execution.
  3. Biennial evaluation of the entire national paved network.
  4. Annual evaluation of roads and bridges under concession.
  5. Updating of the specifications’ manual and a new edition publication (revised and updated) every ten years.
  6. Technical audits of laboratories working for the road sector.
  7. Technical advice to the senior manager of the MOPT’s Roads Directorate, as well as to the minister and vice-minister of the sector.
  8. Research programs on the problems of the country’s paved road infrastructure.

3. Actions to be considered as a result of the modification

To fulfill the tasks set forth in this article, the UCR may enter into agreements with the CONAVI and the municipalities of the country, as well as with other public entities related to the management of the national and cantonal road network, roads, and bridges under concession. Likewise, the Administration must provide, within the legal term, all the information and documentation requested by LANAMME to the latter carry out the tasks entrusted to it.

On the other hand, LANAMME will inform the Ministry of Public Works and Transportation, as well as other public entities related to the management of the national and cantonal road network, the final result of the technical audits carried out to projects under execution and the evaluations made to the paved national road network, highways, and bridges under concession. Likewise, it shall inform the Legislative Assembly, the Comptroller General of the Republic, and the Ombudsman’s Office, as appropriate.

Source: La Gaceta 06/08/21

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