EU calls for carbon tax on cars

An annual pollution-linked tax on cars in Europe should replace the current car registration levy and road taxes, to discourage the use of polluting vehicles and simplify an overly complex system, Euro MPs have said.

Backing proposals from the Commission, MEPs pronounced themselves in favour of introducing a single annual “circulation tax” throughout the EU which would reflect the carbon emissions a vehicle produces.

They even went beyond the Commission’s proposals, calling for the new tax to reflect fuel efficiency and pollutant emissions and not just CO2.

With road transport accounting for a quarter of the EU’s carbon emissions, half of them from passenger cars, the proposals have the potential to help Europe towards its Kyoto targets by boosting sales of smaller, less polluting cars.

The owners of vintage cars would not be penalised, however polluting their vehicles.

But some countries, including Britain, oppose the plans, which they see as a step towards harmonising car tax levels across the EU.

Registration taxes, which vary from zero to 180% of the pre-tax price of a car depending on the country, would be phased out over a ten year period under the proposals.

The system has become complex and ambiguous in an ever more connected Europe, as people moving from country to country may have to pay registration taxes twice while others exploit the system to avoid paying altogether.

Goska Romanowicz

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