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Published
Thursday, October 8, 2020
The 50% reduction of Marchamo
tax advances
By A.M. Costa Rica staff
The deputies of the Permanent Commission of Economic Affairs of the Congress, pre-approved the bill No.22.085 to reduce 50% of the cost of the 2021 Marchamo tax.
The Marchamo is a tax for the right to drive a vehicle, which is collected by the National Insurance Institute.
According to the institute, there are approximately 1,560,350 vehicles in the country that must pay the Marchamo tax every year.
The cost of the Marchamo is calculated by the institute on each vehicle, based on four components.
• The first is the property tax (for owning a vehicle) which is equivalent to 63.86% of the cost of the Marchamo.
• The second is the payment of the Obligatory Insurance of the vehicle which is equivalent to 21.92%.
• The third is the 13% IVA Tax collected by the Ministry of Finance.
• And the rest is for the National Viability Council, known as Cosevi.
The bill pre-approved by the deputies establishes a reduction of 50% of the payment of the 2021 Marchamo tax, which must be paid before December 31, 2020.
However, this 50% reduction would only apply to vehicles whose value does not exceed approximately $33,236.
The reduction will apply to other types of vehicles, including heavy loads, vans and buses, tourism buses, taxis, among others but with different percentages.
In the case of vehicles under the light load category with a value of over approximately $33,236, the reduction of the Marchamo tax would be 25%.
In the case of vehicles with values over approximately $83,090, the reduction will be 5%.
In the case of boats or aircraft, no type of reduction would be applied to the Marchamo tax.
In the case of tourist transport vehicles, students and taxis, an additional reduction of 30% would be applied in the payment of the Public Transport Council tax.
According to the deputy Pablo Heriberto Abarca-Mora who voted in favor of the bill, the top of $33,236 in the reduction of the Marchamo tax was calculated because the majority of vehicles in the country are valued below that price.
The only vote against the bill was by deputy Luis Ramón Carranza-Cascante. He opposes the bill because the reductions in the Marchamo tax, if approved, would cause a decrease in the government income.
According to Congress, if this bill is approved, the Ministry of Finance would be the most affected because a large amount of Marchamo tax is collected for that institution.
Most of the deputies approved the bill due to the crisis that the country is experiencing due to the pandemic that has affected most of the vehicle owners, the Congress said in its statement.
The bill will be approved or rejected by the rest of deputies.
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