Car dealers get concessions on some import taxes

The Ministerio de Hacienda said Tuesday it has reduced the import tax on some used motor vehicles.

The reductions range from 0 to 22.31 percent of the estimated market value.

The import tax on used cars, in some cases as high as 79 percent, generated opposition among those who import vehicles. In fact, negotiators at the ministry delayed a meeting Wednesday with car dealers because the dealers had set up a blockade of traffic.

The Fuerza Pública opened up the roadway, and the used car dealers promised they would not stage one protest again while talks were being held, the ministry reported.

The reduction in import tax is seen as a way to placate the car dealers, but the percentages may change during negotiations.

The ministry also said that by reducing the import tax the value of vehicles on the street would be reduced, and this may be seen in a short time in a decreases in the book value, thereby reducing even more the total cost of an imported vehicle. Costa Rica does not make automobiles. Some countries use import duties to protect local industry.

But for Costa Rica, the import tax is simply a revenue-generating method. And there are some vehicles that are exempt from the import duty under the law.

Cars up to three years old were not affected by the change. So these vehicles, including new ones, will be assessed an import duty of 52.3 percent. The tax was designed to penalize older vehicles, which were seen as being sources of air pollution. So vehicles seven years of age and older will be assessed at 73 percent.

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