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‘Polluters’ to be charged higher road tax

August 22, 2018 at 11:00am
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The Road Transport Department has prepared a new bill on road tax that is to be conveyed to Ministries and Parliament. The bill was posted yesterday on the Department’s website for public consultation purposes. The new road tax system does not apply to already registered vehicles but to new or second hand cars which will be registered after the bill is approved by the House.

The key feature of the new proposed fee system are that ‘polluters’ are required to pay more.

A number of terms that favoured owners of imported second-hand vehicles have been removed. Overall, the older the vehicle and the larger its engine capacity, the higher the road tax. Conversely, owners of ‘cleaner’ vehicles will be charged less.

The changes concern vehicles belonging to categories M1 and N1, ie. saloon vehicles for up to eight passengers  addition to the driver and commercial vehicles weighing up to 3.5 tonnes.

Road tax for larger vehicle categories will be calculated on the basis of the levels of pollutants from emissions, the engine category and the vehicle’s age. That is, the owner will be required to pay an additional tax along with the annual road tax, ranging from zero to €400 per year, on the basis of the vehicle’s engine category (Euro 3, Euro 4, Euro5, or Euro 6).

The new pollutant calculation method, which is binding for EU countries, increases charges.

For example, existing pollutants in a car’s emissions which had been calculated at 15% on the basis of the previous calculation system, will now amount to more than 30%.

Under the proposal the consumer tax will be scrapped on the import and registration of  vehicles which had distorted the market as this tax was imposed only on new vehicles, leading to a loss of €10m in state revenue.

This will be recouped from the higher road tax on polluting cars. The Ministry of Finance is eager to pass the law in order to maintain existing annual revenues from vehicle taxes and charges and also to reduce polluting emission in order to avoid EU penalties.

The bill has been prepared after intensive negotiations between the Road Transport Department,the Finance Ministry, the Customs Department, the Labour Inspection Department, the Environmental Service and the Vehicle Importers’ Associations.