At present, seventeen EU member states levy CO2-related taxes on passenger cars, the European Automobile Manufacturers’ Association (ACEA) has revealed.
Plus fifteen governments in the EU provide tax incentives for electrically chargeable vehicles. In 2009, motor vehicle taxes in the EU 15 amounted to €377 billion or 3.4 per cent of GDP. This information is published in the ACEA Tax Guide 2010, of which highlights are made available today on its website (located here).
Tax incentives
The seventeen EU countries that levy passenger car taxes partially or totally based on the car’s carbon dioxide (CO2) emissions and/or fuel consumption include: Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Ireland, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Romania, Spain, Sweden and the United Kingdom.
By April last year, sixteen Member States had CO2-related taxation, up from fourteen in 2008, eleven in 2007 and nine in 2006. New to the list are Germany, that introduced such system in the summer of 2009, and Latvia. Italy chose not to prolong its one-year fleet renewal scheme which included both CO2-based incentives and incentives for electric vehicles.
Incentives for electrically chargeable vehicles are now applied in all western European countries with the exceptions of Italy and Luxembourg. New to the list this year is Belgium. The Czech Republic and Romania take the number of Member States up to fifteen. The incentives mainly consist of tax reductions and exemptions, as well as of bonus payments for the buyers of electric vehicles.
Call to harmonise CO2-based taxes
Although the introduction of fiscal incentives for fuel efficient vehicles is welcomed across the industry, ACEA- an association which represents the interests of firms within the Europe motor industry- says there is a need to harmonise CO2-related incentives and taxes across the EU in order to strengthen the environmental benefits.
In publishing its new tax guide, the association says that European carmakers have long called for the abolition of car registration taxes which are still widely applied in the EU. A harmonised CO2-based tax regime for cars should be a priority, applying a linear, technology-neutral system that is budget neutral in end effect. It would maximise emission reductions, support manufacturers and maintain the integrity of the single market.
According to the association, electric vehicles are expected to an important contribution towards ensuring sustainable mobility. However, advanced conventional technologies, engines and fuels will further play a predominant role for years to come and as such governments must continue to include fossil-fuelled vehicles within their overall CO2-based tax systems and incentive policies, the association says.
What do you think? Should we focus tax cuts and incentives on alternative fuels only or include greener fossil-fuelled cars? Leave a comment with your thoughts.
