Friday 18 June 2021

Drop In Vehicle Imports Affects Tax Revenue Collection

From January to November 2017, some 10,200 fewer vehicles entered the county over the same period 2016. The largest contraction occurred in new vehicles, according to Hacienda

The decrease in vehicle import last year has resulted in a contraction in the tax on vehicles sales collected by the government.

Image for illustrative purposes

Between January and November 2017, 65,668 new and used cars entered the country, 10,227 less than compared to the same period in 2016.

- Advertisement -

The situation has caused a deceleration in tax revenues, from 8.5% in the January to November 2016 period, to 5.4% for the same period in 2017, detailed Ministerio de Hacienda (Ministry of Finance).

The accumulated tax review from vehicle imports for the January to November 2017 period amounted to ¢230 billion colones (US$410 million dollars), while in the same period in 2016 it was ¢271 billion.

In 2016, taxes from vehicle imports accounted for 7.6% of the country’s total tax revenue, in 2017 it accounted for 6.1%.

Factors for the reduction

- Advertisement -

The monthly index of commercial activity of the vehicle business shows that during the past year, there was a rapid deceleration of this sector. Even as of October, it reported a negative interannual variation of 1.75%, according to the Banco Central (Central Bank).

The automotive sector blames the decline in the import of vehicles to economic factors, such as the sharp increase in the dollar exchange and interest rates.

From April to May 2017, the dollar exchange went from ¢560 to ¢595, then dropping to ¢570 and stabilizing for the second half of the year.

“The increase in the dollar (exchange) does make a difference: as it increases, so does the caution of customers to buy,” said Erick Xirinachs, Regional Commercial Director of Hyundai.

Changes in government policies also affected sales and tax revenues.

Carlos Aguilar, executive director of the Association of Importers of Vehicles and Machinery (Aivema), said that Hacienda modified the rules for the importation of cars of the year, which now is September of each year (from August).

- Advertisement -

Data from Hacienda shows that between January and November last year 43,359 new vehicles entered the country, down from 53,549 for the same period in 2016.

In the case of used cars, in 2017 the level of entry remained very similar to 2016, some 22,300 units.

Add to that the more restrictive measures implemented by the Superintendencia General de Entidades Financieras (Sugef) – General Superintendency of Financial Institutions – restricting credit in dollars for clients with incomes in colones.

The new Sugef rules were issued in 2013 but with a gradual application every year.

“The abrupt change to a more restrictive financing policy was a blow that has been stabilizing” explained Ana Lucrecia Vargas, director of marketing Grupo Danissa, distributor of Nissan and Audi vehicles.

The increase in interest rates in dollars and colones caused the consumer to be more cautious when buying a vehicle, said Jorge Ramirez, general manager of Purdy Motor Costa Rica. “Historically, prior to an electoral process the market, is more cautious,” said the businessman.

José Carballo, president of the Cámara Costarricense Automotriz (CCA) – Costa Rican Automotive Chamber, confirmed that the sales of used cars dropped up to 30% in the last quarter of 2017.

Carballo said that among the effects of the lower imports and sales is the reduction of staff of used car dealers.

Source: La Nacion

 

- Advertisement -

FACT CHECK:
We strive for accuracy in its reports. But if you see something that doesn’t look right, send us an email. The Q reviews and updates its content regularly to ensure it’s accuracy.

Ricohttp://www.theqmedia.com
"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

Related Articles

Costa Rica Say No More Projects with UNOPS

The controversy generated by the United Nations Office for Project Services...

Central America and U.S. Travel Alerts: Costa Rica At Lowest Risk Level

In its new warning system for tourists, the US government included...

MOST READ

Your cell phone can now notify you if you had contact with a positive case of covid-19

QCOSTARICA - Fifteen months after the national emergency against covid-19 was declared, Costa Ricans will have a digital platform where you can be notified...

Nathalie Álvarez Mesén’s feature debut, Clara Sola, ready for the Cannes Directors’ Fortnight

Q ENTERTAINMENT (CINEUROPA) Nathalie Álvarez Mesén’s debut feature, Clara Sola, is ready to take part in this year’s Directors’ Fortnight at the Cannes Film...

American woman found lifeless in hotel bathroom in Sabana

QCOSTARICA - A sad discovery occurred this Thursday morning in a hotel located in La Sabana, in San José, the lifeless body of a...

Tourism sector depends on political will for recovery

QCOSTARICA - The future of tourism operators in Costa Rica depends on the political will to approve a package of bills that favors the...

Today’s Vehicle Restriction June 15: 3 & 4 CANNOT circulate

Today, Tuesday, June 15, vehicles with plates ending 3 & 4 CANNOT circulate The measure is countrywide and applied between 5:00 am and 9:00 pm,...

Plate rupture has potential for stronger quakes

QCOSTARICA - The 5.7-magnitude tremor, felt at 5:27 pmon Thursday, occurred in a maritime zone with the potential for stronger earthquakes, explained Ivonne Arroyo,...

Rainy afternoons and nights this week in most of the country

QCOSTARICA - Characteristic of the rainy season, we will see rain in the afternoons and nights in the Central Valley, the entire Pacific coast,...

Apple extended the life of its older iPhones

QTECH - Whether due to the global economic crisis caused by the Covid-19 pandemic or due to shortages of electronic components, raw materials, factory...

The Best Sports To Play On A Beach

Costa Rica has some of the best beaches in the world. The coastline is blessed with golden sand, beautiful palm trees, and perfect blue...

WANT TO STAY UP TO DATE WITH THE LATEST!

Get our daily newsletter with the latest posts directly in your mailbox. Click on the subscribe and fill out the form. It's that simple!

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.