Thursday, 22 October 2020

Treasury would accept lowering Marchamo on vehicles of less than ¢4.2 million

According to Finance Minister Elian Villegas, the reduction will benefit just over 80% of the country's vehicle owners

QCOSTARICA – As we approach November 1, the day when owners of vehicles can start paying the following year’s Marchamo, there is still no consensus among politicians and legislators on reduction and if so, to what amount and how it will be applied.

Archive photo

In the legislature, there are several proposals, but the one taking center stage is 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, and a 25% reduction for vehicles with a tax value greater than ¢20 million and less than ¢50 million.

However, the Executive Branch of government doesn’t agree. The Carlos Alvarado administration would prefer to see no reduction in the circulation permit, arguing that the Marchamo is not based on the use of the vehicle.

- paying the bills -

The government’s response is to arguments put forth by many, given that this year, 2020, the vehicular restrictions have limited the use of the vehicle, currently to only five days a week, a reduction or rebate is only natural.

At stake here, for the government’s coffers, is about an ¢80 billion colones drop in revenue if the 50% plan is approved by legislators, which would still require the president’s signature for it to become a reality.

For its part, the Ministry of Finance reported that it would agree to reduce the property tax by up to 50%, in the 2021 Marchamo, on vehicles with a fiscal value at less than ¢4.2 million colones.

Minister of Finance, Elian Villegas

“This is a category that is expressly determined at the time the vehicle valuation is applied, and this includes approximately 80% of the vehicles that are part of the Costa Rican vehicle fleet,” explained Elian Villegas, Minister of Finance.

- paying the bills -

The Law provides that owners of vehicles with values greater than ¢4,210,000 pay, in a staggered manner, up to 3.5% of the value of the vehicle, so that those who have the most economic possibilities pay more.

According to Villegas, the measure would be a middle ground that would alleviate the pockets of Costa Ricans, without generating a great financial impact for the government.

According to the Minister, from the tax perspective, the proposal is progressive, since those who own vehicles with a tax value higher than that indicated will not be exonerated.

Treasury records indicate that 80% of the vehicles have a tax value below the referred amount, constitute approximately 80% of the national fleet, which translates into a reduction of ¢25 billion colones in tax collection.

The vehicle property tax is a tax that is collected each year and constitutes 63.8% of the total cost of the Marchamo

Usually, 50% of the income from this tax is used to maintain roads and the other half to help finance different programs related to education, security, and housing.

- paying the bills --

The tax values ​​of the vehicles that are currently published on the Autogestión platform of the Ministerio de Hacienda are not yet those that will used for the 2021 Marchamo.

To use the Autogestión you need to put in the vehicle plate number (required). The plate class and goverment code are optional. The results of all the vehicles and their class/code with the plate number will be displayed.

To change the fiscal value

The results of the Autogestión also allow for a review (solicitud revision) of the tax value, a process that isn’t as simple as it may appear, but worth it

The Ministry of Finance will resolve the request within a period of 30 business days.

So we recommend doing it as soon as possible once the 2021 values are posted, to get the value adjusted before the December 31, 2020 deadline to pay the Marchamo. Once the 2021 Marchamo is paid, you can still request a review, and any changes would apply to the next year’s Marchamo.

Rico
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.

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