Road tax changes to reflect carbon emissions - Cyprus Mail

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A LAW amendment will reduce the road transport department?s yearly income from road licences by ?7.2 million but will prevent fines from the European Union (EU), the House finance committee heard yesterday.

The bill proposes that owners of vehicles such as cars and vans pay an annual road tax based on their vehicles? carbon dioxide emissions and not on engine capacity as is done now.?

Buses - up to now exempt - will also need a road licence.

All new vehicle owners will also pay a vehicle registration fee of ?150, irrespective of vehicle origin or age.

All changes apply to vehicles registered after the law passes.

A finance ministry representative said they were due to earn only ?3.8 million a year from the proposed registration fees changes, falling short of the ?11 million the road transport department calculates it can earn from vehicle registrations, as things stand.

Though the finance ministry said it will try to recover the lost income, it would not say whether this would be by increasing taxes, the head of the finance committee Nicolas Papadopoulos said.

?We believe this law proposal will modernise to a large extent the way vehicles are taxed and will harmonise [the law] with today?s European standards which we must follow,? said Papadopoulos. Taxing vehicles based on their engine capacity is no longer relevant, Papadopoulos said.

?Engines with a much lower engine capacity may have much better performances and so this novel approach, Europe?s modern approach, is the pursuance of lower carbon dioxide emissions,? he added.

Under the proposed changes, road licence fees will be tiered and range from ?20 to ?1,300 depending on the vehicle?s carbon dioxide emission. The threshold is an emission of over 100 grams of carbon dioxide per kilometre while emissions of over 256 grams of carbon dioxide per kilometre will be subject to the maximum charge.

?The proposed bill can ensure we are compatible with EU legislation, fix weaknesses and give us a more effective fee system for vehicles,? said EDEK?s Nicos Nicolaides.?

He added that the changes would benefit lower income earners who do not drive large engine capacity cars.

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Source: http://www.cyprus-mail.com/carbon-emissions/road-tax-changes-reflect-carbon-emissions/20121106

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