Urban pollution, particularly from exhaust fumes, is a growing problem in Costa Rica, as elsewhere. Policy makers have tried to solve the problem through traditional regulatory instruments. But at the same time, other policy initiatives, such as reducing taxes, have contributed to greater car ownership and use, and hence, pollution levels. This study looks at whether the government's practice of differentiating car taxes on the basis of vehicle characteristics can be used to improve air quality in Costa Rica. The results indicate that a tax that increases the relative price of used cars will have significant environmental impacts, while other means of differentation are much weaker.For all vehicle types, the taxable value based upon the depreciation schedule applied is less than the pre-tax market price from ... 1.0 1.2 1.4 0.0 Nissan Sentra Toyota Pickup Izusu Trooper BMW 318 Honda Accord This bias in tax rates which favours older ... 4 Given the use of a flat 70% rate from the fifth year the ratio will start to rise again from this point, but will still be less than one for a number of years.
|Title||:||The Environmental Effects of Tax Differentiation by Vehicle Characteristics|
|Author||:||International Institute for Environment and Development|
|Publisher||:||IIED - 2000|