Christmas season is here and the Costa Rican Grinch government is getting ready to take your Santa Aguinaldo away through the marchamo, so then people ask “what is the marchamo good for?”

The marchamo is basically a “tax” applicable to vehicles which must be paid pay every year. The marchamo includes two elements, a tax and an insurance.

The Insurance covers for injuries or death of people involved in an accident. In the event of death, the insurance will act as a term life policy for the family members of the victim of the accident. In the event of bodily injury, the insurance will cover the medical costs for the treatment of that injury and may include and compensation for disability.

The tax elements of the marchamo includes a tax the Costa Rican government for you to have the right to drive your vehicle. In addition, there are other taxes or fees to support some of the government agencies related to the vehicles such as ARESEP which regulates the price of fuel, and COSEVI which manages the transit police.

The cost of the marchamo is roughly 3.15% of the tax value of the vehicle, and it is managed by INS (National Insurance Company). It is possible to pay the marchamo at bank such as Banco Nacional or Banco de Costa Rica. There are other agencies that will process the payment for the marchamo as well.

Please note that the marchamo is mandatory. Recently, a client inquired whether it was possible to avoid paying the marchamo if he had private insurance. Unfortunately, it is not possible. As noted, the marchamo includes coverage for injury or death. You can also acquire additional coverage through INS or through a private insurance company.

To inquire about how much you need to pay, you can visit the INS website by clicking here.