The administration of Luis Guillermo Solís wiped out a fiscal provision that subjected public institutions to justify increases in expenditures with a study of financial sustainability and solvency.
The same government created this rule on March 2015. On last December, Solís signed an act that got rid of the provision that would have limited public expenses throughout 2016.
Disposing of the rule was justified as a way “to speed up entities management” and “cooperate for achieving institutional goals”. The change was published on La Gaceta of last January 15.
Before the reform, any additional income request would have to be authorized by the Budget Authority.
Now, the current provision states increases in budget can be authorized for duly justified cases, such as addressing “unavoidable expenses” and “priority programs” for the country.
Loosening of spending coincided with president Solís calling on representatives to approve a fiscal plan, which intends to add ¢600.000 million to annual tax revenues from 2016.
The opposition in the Legislative Assembly rejected the reform. The president of this branch, Antonio Álvarez, considers the government let expenses keep piling up.
Source: La Nación.