The Citizen Action Party (PAC) has proposed to reduce by 50% the vehicle property tax for 2021 for those with vehicles valued at less than ₡4.6 million. This would apply to about 1.9 million vehicles, or 80% of all vehicles in Costa Rica.
It is a progressive benefit idea, meaning it’s focused on the lower-income sectors. This proposal excludes the 20% of vehicles with the highest values. That 20% contributes 70% of the ₡170,000 million expected this year from the right to circulation. The 80% of the vehicles that are under the value limit contribute just 30% of the collection.
The PAC will support the bill if this adjustment is made. The current bill would reduce the payment for all vehicles, by different percentages based on the value of the vehicles. For example, those valued more than ₡50,000 million would get a 5% reduction, while the lowest valued vehicles would get 50%.
Acción Ciudadana opposes the adjustment, calling it a blow to public finance and pointing out that those funds are needed in order to maintain public roads.
