| Chris Innis
Almost all West-European countries now levy some form of CO2 tax on passenger cars a survey conducted by ACEA, the European Automobile Manufacturers’ Association has found. The survey shows that over the past 15 months, France, Spain, Finland and Ireland have introduced CO2-related car taxation. In addition, countries such as the Netherlands, Denmark and Portugal implemented significant changes to their existing schemes. The schemes differ between member states and the survey has called for greater harmonisation between countries, otherwise ACEA fears that a fragmented system will distort the market and mean that the EU will not meet its targets. The EU Finance Ministers have recently rejected the Commission’s proposal for a Directive on car taxation., which many observers sees as a missed opportunity.
Current CO2-related car tax schemes differ widely across the EU.
The EU Finance Ministers have recently rejected the Commission’s proposal for a Directive on car taxation., which many observers sees as a missed opportunity.
Italy, for example, offers a one-off incentive when purchasing a new car. France and the UK use CO2 emissions systematically for taxing privately owned and company cars. Similarly, France, the UK and Luxembourg use CO2 emissions as the only factor for car taxation, whereas others apply a combination of criteria including car price, engine capacity and CO2 emissions. Some countries impose rather arbitrary cut-off points to increase tax rates stepwise.
The car industry is advocating a linear system, in which tax levels are directly proportionate to the car's CO2 emissions and every gramme of CO2 is taxed the same. Car tax schemes should neither include nor exclude specific technologies and be budget neutral in end-effect.
Details of the car tax survey and the ACEA Tax Guide 2008 are available at http://www.acea.be/index.php/news/category/taxation/
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