All Western European Countries Will Have CO2-Related Car Taxation This Year; European Auto Industry Urges Harmonization of Schemes
The number of EU countries with CO2-related car taxation rose to 15 in 2008. With Germany set to introduce CO2-related taxation in July of 2009, all Western European countries levy passenger car taxes that are partially or totally based on the car’s carbon dioxide emissions and/or fuel consumption, completing a trend that peaked in 2007 and 2008, according to the European Automobile Manufacturers’s Association’s (ACEA) Tax Guide 2008 published this week.
Romania was the first and so far only Eastern European Member State to introduce CO2-related taxation last year as part of a more comprehensive overhaul of vehicle taxation in the country. In most Central and Eastern European countries, the main concern of policy makers remains to reduce the level of old vehicles on the streets with pollutant emission standards of below Euro 3.
ACEA provides an overview of the CO2-based vehicle taxes here.
The annual Tax Guide gives an overview of motor vehicle taxation in the twenty-seven Member States of the European Union, the countries of the European Free Trade Association as well as Turkey. In 2008, motor vehicle taxes in the EU 15 added up to €378 billion (US$501 billion) or 4.1% of GDP.
The Tax Guide is compiled with the help of the national associations of motor vehicle manufacturers or importers in these countries and describes in detail the taxes that are levied on the sale, registration, ownership and the use of motor vehicles in each country.
ACEA says that the European car industry welcomes the clear trend towards CO2-related car taxation as fiscal measures are an important tool in shaping consumer demand towards fuel-efficient cars. The environmental results may, however, be negatively influenced by the widely varying systems in each country, ACEA notes. The European car industry urges EU governments to show more resolve in harmonizing car taxation schemes.
The car industry advocates a linear system, in which tax levels are directly proportionate to the car’s CO2 emissions and every gram of CO2 is taxed the same. Car tax schemes should neither include nor exclude specific technologies and be budget neutral in end-effect.