Costa Rica: Exemptions for electric vehicles postponed
Incentives to buy cars that use environmentally friendly fuels will have to wait at least another two months. Measures that would exempt such cars from taxes are moving forward, but very slowly, as is the tightening of restrictions allowing old foreign cars into the country.
Monday, May 5, 2008
Both are possible solutions for lowering pollution. However, the decree is still passing through the Ministry of Environment and Energy, and is likely to remain there for another two months.
The Costa Rican government plans to reduce the taxes paid by energy-efficient and low-emission cars. This tax break will cover hybrids, electrics, and those that are powered by biofuels such as ethanol. Automobiles in Costa Rica currently pay between 35% to 53% worth of consumption tax. The tax rate varies based on the car type, engine size and model.
The tax exemption enjoyed by these vehicles is one of the factors driving their sales in the country, where three agencies are now marketing them and two are preparing their market entry.
The selective consumption tax charged on hybrid cars has dropped from 15% to 10%.
Cars between 0-6 years old will incur a 30% selective excise tax with a tax burden of 53%, and those over 6 years old will incur a tax of 48% and have a tax burden of 73%.
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