Q COSTARICA — Eliminating the current annual circulation permit, the Marchamo, and replacing it with a special contribution to finance roads is a possibility that has begun its legislative process in the Legislative Assembly.
This could be a reality with the introduction of bill number 25.292, an initiative by Partido Liberal Progresista (PLP) legislator Gilberto Campos of the Progressive Liberal Party (PLP), which he presented to the legislature this Wednesday.
The bill proposes eliminating the vehicle property tax, an amount representing the largest portion of the annual circulation permit, and, in its place, establishing a new fee to cover the financing of the construction and maintenance of the roads subject to this tax.
This fee would be ¢50,000 colones for private vehicles and ¢25,000 colones for public transportation vehicles.
“It is an injustice that this Legislative Assembly has approved a law to reduce the marchamo and that the government has made every possible effort from day one to prevent it,” said the legislator.
“Instead, we are replacing it with an annual circulation fee with a single flat rate for everyone. From now on, that money will be used specifically to fix the country’s streets, which is what everyone is demanding,” he added.
According to the bill, the Executive Branch will update the amount by way of an Executive Decree, based on the annual variation of the Consumer Price Index in the year prior to the tax period.
In addition, an annual contribution of ¢1,700 colones per vehicle will be established, to be allocated proportionally to different organizations.
The proposal from the PLP, presented during its political oversight session in the Plenary on Wednesday, emphasizes that the revenue from the special contribution will be distributed as follows:
- 50% to the National Road Council (Conavi) to maintain the national road network
- 50% to the municipalities to maintain the cantonal road network
Furthermore, the proposal clarifies that vehicles belonging to foreign states and used exclusively by embassies and consulates accredited in the country are not subject to this tax, subject to the limitations imposed by its application.
Vehicles belonging to international organizations, the central government, and municipalities, ambulances and rescue units of the Costa Rican Red Cross, the National Hospital System, nursing homes, and the National Insurance Institute, and fire engines are also exempt.
In 2023, the Progressive Liberal Party (PLP) spearheaded the bill that was passed to lower the Marchamo by between 5% and 50%.
Since then, this reduction has been applied to the 2024 and 2025, and now to the 2026 Marchamo.
The PLP is now seeking the complete elimination of the Marchamo and the allocation of the revenue generated from this tax, through the established contribution, to road infrastructure.