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News > Latin America

Costa Rica: National Strike Continues as Government, Unions Fail to Reach Agreement

  • Public sector workers are leading the national strike against proposed fiscal reforms.

    Public sector workers are leading the national strike against proposed fiscal reforms. | Photo: Reuters

Published 21 September 2018

The country's unions have vowed to continue the national strike until an agreement is reached with the government on fiscal reforms.

Costa Rica’s unions said Thursday their indefinite national strike would continue after a 13-hour long meeting with representatives of the country's government failed to yield an agreement.

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The unions and state are in a standoff over President Carlos Alvarado’s proposed tax reforms and an ultimatum by the government, which said unions must suspend all strikes as a pre-condition to continue negotiations, a demand seen as unacceptable by many union members and workers.

The unions are calling for the complete withdrawal of the Law on Strengthening Public Finance, which seeks to introduce a series of taxes and while also limiting salary increases, bonus payments and severance packages in the public sector.  

Melida Cedeño, Secretary-General of APSE, a teacher’s association, said the unions submitted an alternatively named bill, known as the Justice and Solidarity Tax Reform, in August, which could be used as the basis for negotiations.  

The union’s alternative bill focuses on combatting tax evasion and fraud; new and increased taxes on companies and banks that generate extraordinary profits; eliminating "luxury" pensions for former presidents; and reducing state financial support for political parties.

According to union representatives, their proposal would avoid hurting middle and working class people and public sector workers who would lose benefits in the executive’s bill.

Alvarado’s proposed bill includes the creation of a 13 percent value-added tax to replace the current sales tax, and expanding tax collection to the service sector and basic living expenses. The other controversial issue is a 50 percent reduction in bonuses, salary limits, time limits for severance payments in the public sector, and benefits obtained through collective bargaining.

During the dialogue, union representatives called for the establishment of a multi-sector roundtable that would include social movements and legislators. Labor Minister Steven Nuñez said the government is willing to establish the roundtable but insists the strike must be ended before any such plans are discussed.  

Friday marked the 12th day of the national strike, which has garnered support in Congress for dialogue between the government and the unions as a way to reach a mutually agreed-upon fiscal reform.

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