San José, Costa Rica, since 1956

Costa Rican government vehicles set to 'go green' with new tax break on hybrid cars

The Costa Rican government is betting that if drivers can save some money they’ll be more willing to brave the country’s notoriously potholed roads in a Prius instead of a sports utility vehicle.

On Monday afternoon, the Finance, Transportation and Environment ministries signed an agreement dropping the sales tax on hybrid vehicles to 10 percent from 30 percent, according to a press release.

Environment Minister René Castro said the tax cut on the vehicles makes the hybrid vehicle market more dynamic and facilitates greater access to more efficient cars and trucks.

“This decision tackles the most important challenge regarding emissions – the transportation sector. Costa Rica is moving forward with determination toward that goal of carbon neutrality,” said President Laura Chinchilla, according to the press release. 

Besides incentivizing sales, the decree orders government ministries to modernize their fleets, purchasing vehicles that use hybrid technology or alternative fuels like electricity, natural gas and LNG.

Public and private universities, and trade and technical schools will also be expected to offer curriculum and training for the promotion, maintenance and care of hybrid and alternative fuel vehicles.  

“With these directives we hope to promote both the public and private sectors to actively contribute to the reduction of polluting gas emissions and the achievement of the C-neutrality goal,” Castro said, according to the release.

Costa Rica has pledged to become the world’s first carbon-neutral country by 2021.

The decree was signed Monday by President Chinchilla and Minister Castro, as well as Public Works and Transportation Minister Pedro Castro and Finance Minister José Luis Araya.

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