After an unexpected second approval in the legislative assembly, the reform to chapter three of the Law on Incentives and Promotion for Electric Transport must only wait for the signature of the nation’s president, Carlos Alvarado Quesada, for its publication and entry into force.

«We are very happy, it has been a process of joint work between various sectors,» says Silvia Rojas, director of the Electric Mobility Association of Costa Rica (ASOMOVE), in dialogue with Portal Movilidad.

She adds: «This reform is extremely important for the country because it aims to make electric mobility more accessible to citizens.

Given that the law has a chapter on economic incentives with a five-year term that will end in January 2023, the need to propose an extension of the deadlines was accepted by the plenary.

What does the reform consist of?

In principle, the reform modifies the value added tax (VAT) on electric vehicles.

In this sense, a gradual exemption from VAT is established, independent of the value of the electric car. Under the reform, the tax will be 1% in 2023 and will increase by one percentage point per year, until it reaches 13% in 2035.

In addition, the customs and selective consumption value tax is modified.

There will be a gradual exemption scheme for this tax that will change every three years, starting in 2022 with a 100% exemption.

Also, the bill renews the exemptions established in the current law to the property tax, which is paid on the marchamo.

From this, the user will be exempted in the first year of the reform. Then, 80%, 60%, 40% and 20% will be exempted for the next four years, until the sixth year, when it will be paid as usual.

In addition, it establishes that companies producing and assembling electric vehicles will be exempted from VAT for ten years, as long as the national value added is at least 20%.

Finally, according to the document, as soon as the first electric vehicle assembly plant is set up in the country, the Energy Directorate of the Ministry of Environment and Energy will register it so that it can access the benefits indicated by the regulation.

Considering that the inclination for electric vehicles is growing in the country, such discussions tend to have the consensus of both the civil and political sectors.

«In Costa Rica there is already a national consensus on which route the country should take and what is the commitment we have at national and international level. The interest of Costa Ricans in electric vehicles has also grown,» says Rojas.

He adds: «The market has grown a lot because the conditions are there. We have a good offer with more than 30 different models and almost 20 brands. This is because we have regulations and charging infrastructure. This has helped the car manufacturers to send us models».

What will be Costa Rica’s next step?

«Now we are going to go for public transport, which is one of the most important steps. The way in which access to electric mobility is democratised is through this segment. We are trying to promote the transition,» says Rojas.

In this sense, the director of ASOMOVE anticipates that the focus will be on the introduction of electric buses, of which there are already some pilots, and zero-emission taxis in the territory.