Varela orders proposed gas tax increase returned to Cabinet

He issued a message on his Twitter account saying that other means will be considered to raise money for a pension increase.


President Juan Carlos Varela ordered Minister of Health Francisco Javier Terrientes to withdraw a bill from the National Assembly that sought to increase the gas tax by five cents a liter to finance a pension increase for retirees.

Through his Twitter account, Varela said he has ordered the bill to be withdrawn "to further evaluate alternatives in the executive."

The initiative has been widely criticized by civic groups and opposition political parties. The Chamber of Commerce was one of the most vocal opponents, saying the issue needed to be discussed through a dialogue. 

The draft law was approved by the Cabinet Council and presented last week to the National Assembly by Acting Health Minister Miguel Mayo. It sought to raise the $80 million needed to fund the increase.

But numerous calls have been made for the government to permanently address the program's financial problems. Revenues are exceeding costs, and if nothing is done, the program will exhaust its $4.5 billion reserve fund in 2024.



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