It restricts the freedom of commerce and implies an “intrusion into the market,” says Attorney General

Q COSTA RICA – “It restricts the freedom of commerce and implies an intrusion into the market,” says Costa Rica’s Attorney General, Julio Jurado, commenting on the decree emitted by the government last August, that prevents importers of new vehicles from introducing into the country late-models before the month of September.

This year, for example, 2018 models cannot be in the market before September.

The Attorney General considers the government decree restrictive of freedom of trade, unconstitutional, and lacking the legal authority.

Jurado presented his written arguments before the Constitutional Court or Sala IV as it is commonly refered to, that is studying the action of unconstitutionality presented by the Asociación de Consumidores Libres (ACL) – Association of Free Consumers – against the decree promulgated by President Luis Guillermo Solis and the Ministry of Finance in August 2016.

Jurado added, “the restriction cannot be classified as a reasonable and adequate measure to achieve uniform fiscal (tax) values.”

According to the Attorney General, the decree is also unreasonable because the Tax Administration has “extensive powers”, which would allow it to seek alternative mechanisms that are proportionate to address the situation it seeks to regulate by decree.

The government and the Ministry of Finance argue that the early importation of late-model vehicles, devalues the rest of the vehicles in the country, in effect lowering their fiscal (tax) value. Since the fiscal value is used to calculate the property tax payable for the year,  included in the cost of the Marchamo (circulation permit), the lower values will mean a lower tax revenue.

For its part, the Association of Free Consumers argued before the Constitutional Court argues that the decree violates freedom of trade, freedom of contract and freedom of enterprise, as well as the rights of choice, among other points of law.

Rogelio Fernández, vice-president of the Association of Free Consumers, said he was happy that the Attorney General is on their side. “We are hopeful the action will finally be declared valid (accepted by the Court), because the State lawyer himself is concluding, like us, that the decree is unconstitutional,” he said.

For his part, Fernando Rodríguez, Deputy Minister of Finance, said he was “surprised” at the Attorney General’s position.

There is no date for the Constitutional Court to decide on the merits of the action. Such processes may take several months or even years.

Source La Nacion