Saturday 30 September 2023

Reduction to the Marchamo faces a key week in Congress

Drivers ask the Government that this year there be a reduction.

Paying the bills


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30 September 2023 - At The Banks - Source: BCCR

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QCOSTARICA — The reduction in the 2024 Marchamo will have a vital week in the Legislative Assembly, with an eye to moving the bill to its completion (approval).

Last week, the special commission that ruled on the text will define whether or not to accept the government’s counterproposal, ending the week, on Thursday, when the Minister of Finance, Nogui Acosta, indicated that they were going to send a proposal to the legislative body in search of finding a middle ground in the initiative.

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For the Government, the initiative by the Partido Liberal Progresita (PLP) generates an important fiscal gap and that is why President Rodrigo Chaves has threatened a veto of the bill is approved in its proposed form.

The proposal by the PLP aims to reduce the Marchamo between 20% and 60%, which would generate a decrease in the collection of between ¢50 and ¢60 billion colones.

“One last space was opened to seek as soon as possible a new proposal that can have greater political support, which should be known in a very short term,” said the President of Congress, Rodrigo Arias.

“There are conflicting positions, different appreciations about the impact that this measure would have,” he added.

The fact that the Treasury sends a proposal does not mean that it will be accepted. Eli Feinzaig and Jorge Dengo were already emphatic on the elements that are non-negotiable within the initiative.

Fast Track

The initiative has a consensus to approve a reduction; the differences lie in the final percentage.

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“We agree that it has to move forward, that there should be a reduction in the Marchamo, the question is how much?” confirmed Pilar Cisneros, the faction head of the government party, the Partido Progreso Social Democrático (PPSD).

There also seems to be consent from the majority, to give the bill ‘fast track’ and thus speed up the process to have it ready on time, to be applied for the 2024 collection period, which begins on November 1.

“There is an agreement from all the faction leaders to approve it and seek a fast track or what the Partido Unidad Social Cristiana (PUSC) faction proposes, which is to dispense with all paperwork,” said Alejandro Pacheco, PUSC faction leader.

“There is a consensus of all that the Marchamo must be reduced; It seems to me that there is an agreement to seek a special, agile procedure, to approve it on time”, Arias reinforced.

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One of the concerns with expedited filings is the possibility of having too many motions filed, thus delaying approval.

This time, it seems like the government party legislative members would be the ones to stand in the way of the issue, but Cisneros said they won’t be doing that.

What is the Marchamo?

The Marchamo is a yearly circulating permit required by all registered vehicles. The cost includes, among other items such as compulsory insurance, a property tax based on the fiscal value (value of records for financial purposes) of the vehicle, to be paid by December 31 of each year.

The reduction in the Marchamo would affect the property tax paid.

For example, the Government proposes that vehicle owners pay a minimum amount of ¢25,000 colones for a vehicle with a value of less than ¢2.5 million after that scaled from 3.5% to 6.5%.

The percentages proposed by the Government are much, much lower than the 20% to 60% in the original proposal.

Costa Rica has one of the highest Marchamos in the region. For example, in neighboring countries such as Panama, vehicle owners pay up to four times less. In addition, a late model vehicle or the oldest pays the same rate.

Last year it was less than 30 dollars, that is, about ¢15,000 colones, while in Costa Rica many owners pay hundreds of thousands of colones, some millions, each year, for the right to circulate on congested, substandard roads.


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"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.

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