How times have changed. Previously taxation on vehicles was considered the scourge of motorists – but now it is being used to encourage the use of green cars throughout Western Europe.
According to the European Automobile Manufacturers Association Tax Guide 2008, published this week, when Germany introduces carbon dioxide (CO2) related taxation in July this year, all Western European countries will levy passenger car taxes based partially or totally on the vehicle’s emissions or fuel consumption.
The annual tax guide acts as an overview of motor vehicle taxation in the 27 Member States of the European Union as well as countries of the European Free Trade Association and Turkey. It is estimated that in 2008, vehicle taxes in the EU 15 added up to 4.1 per cent of GDP – some €378billion.
So far, Romania is the only Eastern European member state to introduce CO2 related tax as in most central and eastern European countries the main concern is to reduce the number of old vehicles on the streets with pollution standards below Euro 3.
According to the ACEA, the European car industry welcomes the trend towards CO2 taxation although it notes that the environmental results may be negatively influenced by the widely varying systems in each country. The car industry wants a linear system in which tax levels are directly proportionate to the car’s CO2 emissions.
