Plans for staggered car taxation on environmental basis
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The Ministry of Finance is preparing a bill that would increase the taxation of cars on the basis of the amount of carbon dioxide that they emit.
A proposal on the matter is to be put forward to Parliament later this year.
The change would mean that the amount of the annual vehicle tax would be determined on the basis of the carbon dioxide emissions that a vehicle produces. The more emissions, the higher the tax.
The bill would probably take effect by early 2010, once the Finnish Vehicle Administration (AKE) makes the necessary changes to its data systems.
The bill is still under preparation, and no political decisions have been made yet on how steep the progression of the tax should be.
Ministry of Finance official Merja Sandell, who is preparing the bill, says that the change is to target cars that are now being bought.
"This is the first step that is being taken. In the future, differences in taxation between high, and low-emission cars can be increased to make the incentive effect more effective", Sandell says.
The Ministry of Finance sharply denies that any other kinds of transport taxation would be on the table. For instance, the ministry says that no changes are in store in the tax paid on the purchase of a car.
The government policy programme says nothing about any far-reaching reform in car taxation. There is only an overall mention about car taxation, according to which there is a need to speed up improvements " in vehicle technology and in vehicle taxation in the direction of low emissions".
Of the government parties, the Centre Party and the National Coalition party have not shown much willingness to evaluate the prospects for the near future in transport taxation. Prime Minister Matti Vanhanen (Centre) and Finance Minister Jyrki Katainen (Nat. Coalition Party) both refused to comment on the matter.
One reason given for the tight-lipped policy is the impact that public debate might have on car sales, and the fact that neither reports nor decisions have been made on large transport taxation reforms.
The Swedish People's Party is reportedly satisfied with the planned staggering of taxation according to emissions. One party official says that the party might be willing to consider cutting the tax on the purchase of a car.
The Greens want a staggered emissions tax on both the car purchase tax and the annual vehicle tax. The party also wants to eliminate the special tax on diesel vehicles. However, the government's climate policy expert Oras Tynkkynen (Green) notes that a strong focus in taxation on the use of a car is not without problems.
"If the car tax goes down, car prices will go down, and more cars will be bought. Studies show that the more households have cars, the more they will be driven, and the less public transport will be used. So if it is implemented in a bad way, the change in car taxation could lead to an increase in emissions from driving rather than reducing them", Tynkkynen points out.
Helsingin Sanomat
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| 12.6.2007 - TODAY |
 Plans for staggered car taxation on environmental basis |
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