• Brussels looks to swap registration taxes for CO2 charge

    The Commission has published proposals to abolish vehicle registration taxes and replace them with a harmonised EU tax based on a vehicle’s carbon dioxide emissions.

    Download file - form

    Please complete the this form to have access to file, once submitted the file will load on the browser window.

    [mailchimp_signup][/mailchimp_signup]The aim is to simplify car taxation to avoid people crossing borders paying twice, and in the process offer incentives for more fuel-efficient cars.

    T&E issued a statement welcoming the idea of linking car taxes to emissions, but expressing skepticism about linking CO2 emissions to an abolition of vehicle registration taxes. “This is an incredibly blunt solution to a minor problem,” said T&E director Jos Dings, “namely the double-taxation of a tiny number of people who move to another state and take their cars with them. And it will not result in reduced car emissions.”

    “Member states should retain the right to impose registration taxes – they too should be linked to CO2 emissions, and set at levels that genuinely encourage consumers to buy cleaner cars.”

    “We would also like to see additional incentives for the cleanest models and penalties for the biggest polluters. Only in this way will the EU get its rapidly rising car emissions under control.”

    The proposals were expected to be published last month, but disappeared from the agenda of a meeting of the 25 commissioners at the last minute, but they were finally published earlier this month. They come at a time when EU greenhouse gas emissions are on the rise – figures for 2003 show climate changing gases rose by 1.3% in 2003, taking the EU even further away from its Kyoto commitment of 8% below 1990 levels by 2008-12.

    Registration taxes exist in some countries but not others. Denmark has the highest at €16 000 per vehicle.

    The EU tax commissioner Laszlo Kovacs says the proposals are good news for the car industry which currently has to adapt prices depending on different levels of registration tax. But the chances of approval are not good, as finance ministers traditionally oppose tax proposals at EU level.

    This news story is taken from the July 2005 edition of T&E Bulletin.