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Less Tax Revenue on Imported CR Vehicles

Costa Rica News – Sometimes you look at Costa Rican government reactions to their own implemented laws and just say to yourself, what in the hell did you think was going to happen? This is another example of the idiots in the Costa Rican government not seeing the obvious consequences of their own actions. They are wondering right now why their revenue on import taxes from vehicles has gone down.  

The number of imported cars actually went down the first 3 months of 2013.  Well lets see what could have been the cause of that.

1. A law was passed and is now being enforced that makes it illegal for companies to import vehicles that have been costa rica stupiditydetermined as totaled on their title.  This was a huge part of the vehicle import business in Costa Rica, which was basically a scam.  Companies would import the totaled vehicles, fix them up a bit, roll back their odometer, and then sell them as working used vehicles.  After driving the vehicle about 2 to 3 months (if you were lucky), it would require repeat visits to the mechanic.  By disallowing this scam to continue on a large scale that decreased the number of imports.

2. The change in the calculation of the taxable value of used cars in December of 2012 made taxes go up and discouraged people importing vehicles. Hmmmmm, let’s see, the Costa Rican government decided in December that they wanted to increase taxes on imports and because it costs more money, less people decided to import a vehicle.  I think  we can all realize that this is a simple economic concept, supply and demand.  Increased costs equals less demand.  What schools did these people go to where they did not learn this?

What the Costa Rican government needs to do is find the point where supply and demand are at an equilibrium in order for them to maximize tax revenue.  If you want to import a vehicle and decide that you want to nationalize it you are going to need to pay the import taxes, which are currently the following (based on the value the Costa Rican government has put on the vehicle in the Hacienda Valor):

  • Current year to 3 years old- 52.29%
  • 4 and 5 years old – 63.91%
  • 6 years old or more – 79.03

This is the though pattern of most people in Costa Rica. Instead of looking to make more money by creating a business model that is based on maximizing revenue by decreasing the amount you make on each item and making more by volume, the thought is it is easier to just make as much money on each transaction.

This has proven a failed business model everywhere based on the principle of supply and demand.  The only reason that it continues to be implemented by the Costa Rican government is that they are an organization that is too big to fail.  However, the trickle down effect it has had on the local level in Costa Rica has resulted in an increased amount of scams, corruption, and failed businesses.

We can only assume that the Costa Rican typical response to this will be that they will raise taxes again to try to make up for the loss.  Stupidity pisses me off, and the CR government proves they have the brain power of a wet fart every single day.

The most humorous part of this entire situation is that even with all these taxes it is still usually less expensive and less risky to import your vehicle to Costa Rica.  Take a look at some of the prices of the vehicles on Craigslist.  Plus when you import a vehicle at least you know the history.  Those scam cars that are lemons are still flooding the market in Costa Rica.

If you would like to have a little more information about importing a vehicle or your household to Costa Rica, get the free E-Book for Shipping Costa Rica here.

 

 

 

 

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