Weekly Report - 06 December 2012 (WR-12-48)

After months in the pipeline, Nicaragua’s 92-seat unicameral legislature has approved President Daniel Ortega’s tax reform proposal. As was the case with his 2009 fiscal reform, the new bill, which was agreed with the private sector lobby, Cosep, fails to introduce major structural changes, once again exposing the gap between Ortega’s radical left-wing rhetoric and his pro-business policies. The reform also failed to address the issue of tax exemption or exonerations – long a demand of the International Monetary Fund (IMF). Yet despite this, a new agreement with the IMF appears to be on the cards. Cooperation with the US and multilateral finance organisations also appears as strong as ever, despite transparency concerns raised by the recent 4 November municipal vote [WR-12-45].

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