Emission-based car tax to bring down price of new vehicles next year
Price of some models could drop thousands of euros
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The tax paid with the purchase of a new car will be based on the emissions generated by the vehicle as of next year. The change, announced on Thursday, will mean that the price of some of the lower-emission models could fall by thousands of euros.
The annual vehicle tax will become emission based in 2010.
So far, the car tax accounts for nearly a third of the retail price of a new car or an imported used car. From the beginning of the year the tax will be 10 to 40 per cent depending on the amount of carbon dioxide it puts out.
"The government hopes to favour environmental friendliness and low emissions", said Prime Minister Matti Vanhanen (Centre) announcing the changes at a press conference on Thursday.
The government hopes that the moves will lead the rapid proliferation of low-emission vehicles in Finland. The government also said that it will implement support for public transport of urban areas next year, with EUR 10 million allocated for the purpose each year.
The car tax reform was enthusiastically welcomed by car dealers.
Pekka Puputti, head of the Association of Automobile Importers in Finland, said on Thursday that there will soon be "truly surprising" prices in Finnish car showrooms.
He said that small diesel cars will be priced to attract customers into showrooms.
"Demand that has been dammed up will unravel and sales will pick up", Puputti says.
Pekka Rantala, head of the Finnish Central Organisation for Motor Trades and Repairs said that stocks of high-emission vehicles will certainly be sold out at the end of the year.
The government has constantly emphasised that it is implementing the changes with a view to the interests of the car trade business, and that efforts are being made to keep "market disturbances" at a minimum. With that in mind, the government had kept news of a cut in car taxation a closely under wraps until now.
Helsingin Sanomat has learned that dealers were informed of the upcoming tax cut on Wednesday, and news of upcoming new prices for cars started coming as soon as the government's decision was made public.
New price information is already available on car dealers' websites.
Also praising the announcement, and the end of uncertainty, was Teemu Lehtinen, head of the Taxpayers' Association of Finland.
"Cuts in the vehicle tax and structural changes have been awaited since the election debates that preceded the Parliamentary elections, so it truly is high time to move forward in the matter", Lehtinen observed.
In spite of increased sales, the government's goal is to prevent an increase in the number of cars on the road. Vanhanen said that the threshold to scrap old cars should be lowered.
In his view, cars should start being scrapped when they reach the age of 15.
If the number of cars does not stay under control, carbon dioxide emissions will not come down. Vanhanen says that the government plans new rises in fuel taxation, but he would not set a schedule.
Vanhanen says that the goal is to get the average fuel consumption of cars down to about four litres per 100 kilometres. The goal is very challenging.
At present, average consumption of petrol-fuelled cars is just under eight litres per 100 kilometres.
Helsingin Sanomat
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| 2.11.2007 - TODAY |
 Emission-based car tax to bring down price of new vehicles next year |
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