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Bill Approved That Exempts Electric Vehicles Of All Taxes

Buying an electric car just got cheaper with the approval on Monday of the bill that exempts electric vehicles from sales taxes and import duties.

The bill, that was stalled in the legislative process for the past two years, got final approval with 38 votes in favor and 2 against, from Frente Amplio legislators Jorge Arguedas and José Ramírez.

La Nacion reports several electric cars Nissan, Mitsubishi, Hyundai, BMW and Tesla went up to the Irazú Volcano (elevation 3.432 meters / 11,260 feet), last Friday, to disprove the myth that these vehicles are not good on slopes. Photo: Rafael Pacheco.

The main objective of the initiative is an increase in the import of a greater variety of electric and reducing the dependency on imported oil.

The bill, once it goes into force, exempts from all taxes fully electric vehicles costing less than US$30,000 (¢17.4 million colones).

Vehicles costing between US$30,001 and US$45,000 will pay only half of the sales tax and 75% of the selective consumption tax.

In as much, vehicles valued at between US$45,001 and US$60,000 will pay the sales tax and only one half of the selective consumption tax.

Vehicles valued US$60,001 and more will pay full taxes.

Currently, fully electric vehicles pay the sales tax and ‘selective consumption tax” of 17.4%. Thus, the tax on a US$30,000 vehicle is US$5,220.

Fully electric vehicles will continue to be exempt from any import (customs) duties.

To meet the possible demand for electric vehicles, the bill establishes that the Ministry of the Environment and Energy (MINAE) must ensure that recharge centers, known as “electrolineras”, are built every 80 kilometers on national roads and every 120 kilometers on cantonal roads.

The bill also places obligations on the Ministerio de Obras Públicas y Transporte (MOPT) to support the initiative and the National Apprenticeship Institute (INA) – National Apprenticeship Institute – to train the future mechanics on electric vehicles.

Apart from the sales tax exemptions, the bill also provides tax incentives to companies who, little by little, replace their gasoline vehicles with electric; authorizes public institutions to replace their vehicle fleet with “100% electric” vehicles; and, declares “of public interest” the promotion of electric transport, both public and private, with provisions to replace the bus fleet in the country to electric.

One of the main drivers of the initiative,  legislator Marcela Guerrero, of the Partido Accion Cuidadana (PAC), said that it is a pioneering law in Central America and added that it will help to achieve the decarbonization of the economy with clean energies. “We must implement aggressive energy transition measures, and this project is part of that decarbonization agenda,” said the legislator.

“We are proposing a State policy on electric transport with a comprehensive law, which includes economic incentives and non-economic incentives, and that also structures the network of recharging centers,” added Franklin Corella, the other proponent of the initiative.

For the legislators opposing the approval of the bill, the bill applies to vehicle purchases that can only be accessed by “the rich” and that is important to define a solid energy policy for the country and not in “small steps” such as the result of this bill.