QCOSTARICA – TICO BULL: While legislators have the power to approve the proposal to cut the property tax of the 2021 Marchamo in half, as being currently discussed in Congress, President Carlos Alvarado will have ultimately the last word.
You see, the president, who opposes the proposal for the fiscal gap of ¢80 billion colones, always has as a last resort the power of the veto.
For Alvarado, however, it cannot be an easy decision. On the one hand, he has the obligation to guarantee the entry of fresh resources for the State, which has generated protests and violence in the streets for the last 10 days; while on the other hand, thousands of Costa Ricans are living through economic problems, due to an historical unemployment economic slowdown caused by Covid-19.
For the cut in the annual circualtion permit to apply for 2021, legislators must approve the bill in two debates, and the president must sign off on it before the end of the October.
This, because no law is retroactive and once the INS begins the collection of the Marchamo on November 1, there is no turning of the page.
The project that proposes to reduce the tax corresponding to the property tax, which represents 63% of the cost of the total cost of the 2021 Marchamo, by 50%, has already been approved in committee, and only awaits debate in the legislative floor and first vote.
If the proposal is approved in first vote, it then requires a second debate and second vote, which can be in as little as a few days following and then sent to Casa Presidencial for the President’s signature.
If the president signs it, it then has to be published in the official government newsletter La Gaceta.
If you will recall, in April, the entire process was fast-tracked to increase the sanitary vehicle restrictions sanctions. So, it can be done, if there is political will and consesus among the actors in the process.
The 50% proposal
The 50% reduction to the property tax of the 2021 Marchamo apply to vehicles whose Valor Fiscal (tax value) does not exceed ¢20 million colones, while for vehicles with a tax value greater than ¢20 million and less than ¢50 million, the reduction would be 25%.
However, the members of the supreme powers such as legislators, ministers, magistrates and President Carlos Alvarado, would be obliged to pay 100% of the cost of the 2021 Marchamo.
Will the president veto?
“This proposal would alleviate the pockets of Costa Ricans who, due to the pandemic, have seen their income affected and the possibilities of using national highways reduced. Now the proposal will go to the plenary for its final vote,” said Franggi Nicolás, PLN legislator who is promoting the reduction.
“You have to think about the pocket and the finances of the households, which in many cases will not even have an Aguinaldo, or resources to pay for the Marchamo. Also for a matter of justice, these measures are necessary, it has been a year that due to the vehicle restrictions imposed by the Government, thousands of Costa Ricans have not been able to remove their vehicles,” said Pablo Heriberto Abarca, PUSC party legislator, who also promotes the reduction.
“Let us not forget that what is not collected in taxes is money that the country loses to invest in infrastructure and services, increasingly worsening people’s living conditions and especially affecting the poorest people and communities. The PAC is not blocking the initiative. We have presented motions so that the cars of the most wealthy people are not benefited,” argues Laura Guido, legislator of the PAC, the same party of the President, is wishy-washy, for the reduction, but…