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### Viewing cable 09SANJOSE279, COSTA RICAN BUDGET TRANSPARENCY

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09SANJOSE279 | 2009-04-06 14:02 | 2011-03-21 16:04 | UNCLASSIFIED | Embassy San Jose

`

    VZCZCXYZ0000
    RR RUEHWEB

    DE RUEHSJ #0279/01 0961456
    ZNR UUUUU ZZH
    R 061456Z APR 09
    FM AMEMBASSY SAN JOSE
    TO RUEHC/SECSTATE WASHDC 0717
    INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
    RUEATRS/DEPT OF TREASURY WASHINGTON DC

` `

    UNCLAS SAN JOSE 000279

    SIPDIS

    DEPT FOR WHA/CEN AND EEB/IFD/OMA: ASNOW AND JJACOBY
    PLEASE PASS TO TREASURY FOR SSENICH

    E.O. 12958: N/A
    TAGS: ECON EFIN PGOV PREL SNAR CS
    SUBJECT: COSTA RICAN BUDGET TRANSPARENCY

    REF:  A) STATE 28885
    B) 08 SAN JOSE 0220

    ¶1. SUMMARY: Embassy San Jose continues to affirm the transparent
    fiscal management of Costa Rica's national budget.  Minister of
    Finance Guillermo Zuniga leads a reform-minded ministry that is
    committed to advancing management and budgeting sophistication while
    providing public access to the Ministry's publications.  The
    Department of Treasury's Office of Technical Assistance's (OTA)
    programs on tax administration, budget management, and debt
    management have enhanced the Minister's reform efforts.  As a
    conscious policy, the Ministry strives to further improve
    transparency to move taxpayers from the informal sector to the
    formal sector by enhancing the Ministry's credibility and
    reputation.  In short, the answer is "yes" to all the questions
    posed by Ref A, per the SFOAA 2009: Costa Rica will receive USG
    assistance in FY 2009; the GOCR's budget, including income and
    expenditure figures, is publicly available; and those public figures
    are accurate.  END SUMMARY.

    ------------------------------------------
    MINISTRY OF FINANCE PRACTICES TRANSPARENCY
    ------------------------------------------

    ¶2. Post prepared the following responses to the questions presented
    in Ref A:

    -- Is the central government expected to receive, or is it already
    receiving U.S. foreign assistance funded using FY 2009 funds?

    Yes.  For FY 2009, the GOCR will receive USG assistance in the form
    of Foreign Military Financing (FMF), International Military
    Education and Training (IMET), International Narcotics Control and
    Law Enforcement (INCLE), and other funding, most of which support
    important bilateral and regional security and law enforcement
    programs, including the Merida Initiative.

    -- Is the host country's budget publicly available?

    Yes.  GOCR Budget documents are public and readily accessible
    through the internet.  The Ministry of Finance provides the budget
    in both hard copy and digital formats.  For example, the budget for
    2009 is available at the following webpage address:

    https://www.hacienda. go.cr/NR/rdonlyres/F0DEF0D2-E58D-
    4F20-9709-F2156BB8DD43 /21387/Ley2009Ingresos.pdf

    In addition, budget documents are available on the Ministry of
    Finance's website for years 2004-2008.

    -- Are incomes and expenditures included in the publicly-available
    budget?

    Yes. Both the revenue and expenditure sides of the fiscal ledger are
    publicly available.  In fact, the Ministry of Finance openly
    discusses fiscal spending scenarios within the national budget with
    the national legislature each November, the designated month for
    annual budget debate and approval by the legislature.

    -- Do publicly-available budget documents accurately reflect actual
    government incomes and expenditures?

    Yes, and increasingly so as the Ministry of Finance is improving its
    overall budget management, with U.S. Treasury OTA assistance.

    ------------------------------
    BUDGETING IMPROVEMENTS CONTINUE
    ------------------------------

    ¶3. Since last year's report (Ref B), the Ministry of Finance
    launched an office of Internal Affairs (IA) unit -- akin to an
    inspector general's office -- to investigate illicit activity or
    corruption within the Ministry.  Guided by OTA assistance, the IA
    unit completed 12 investigations, processed 22 complaints (referring
    one for criminal investigation), and processed five administrative
    actions with employees in 2008.  Vice Minister of Revenue
    Administration Jenny Phillips recently told us that the work of the
    IA unit is vital to building confidence among Costa Rica's citizenry
    for two reasons:  (1) to further build operational credibility of
    the Ministry (which is relatively better-run than most finance
    ministries in Latin America) and (2) to attract more taxpayers from
    the informal sector into the formal sector.

    ¶4. As for USG assistance to the Ministry, Minister Zuniga recently
    praised OTA programs in a meeting with Treasury DAS Nancy Lee at the
    IDB meeting in Medellin.  He stated that OTA programs were
    "tremendously helpful in areas such as tax collection, Treasury
    management, and expenditure evaluation."  As we concluded in last
    year's report, the partnership of Costa Rica's Ministry of Finance
    and the OTA has been a win-win situation for the GOCR and the USG.

    ¶5.  COMMENT:  Costa Rica's April 2, 2009 inclusion as one of four
    countries in the OECD's list of "jurisdictions that have not
    committed to the international agreed tax standard" will likely
    increase the current Costa Rican administration's work with OTA.  On
    April 3, Post received a call from Minister Zuniga himself
    emphasizing his acceptance of the OTA suggestion that Costa Rica
    regulate the Internet gambling sector using Antigua as a possible
    model.  (This is following a recent OTA assessment visit, septel.)

    WILSON

`