By Brian Johnson - 4th September 2006
MEPs have backed proposals to replace national car registration taxes with a progressive tax on vehicle pollution.
Danish MEP Karin Riis-Jorgensen, presenting her report on European commission plans to scrap the vehicle registration charges currently levied in 16 member states, said the proposals would help cut CO2 emissions across the EU.
“A common EU tax base will not only improve the functioning of the internal market, fiscal measures also show a potential in reducing CO2 emissions,” Riis-Jorgensen told MEPs.
She also argued that the differing levels of registration taxes were hindering free movement across Europe with car owners facing considerable financial costs when they want to transfer a car from one member state to another.
"The current passenger car market is not functioning well and is a burden for people who want to move in Europe. The stressful and tiring process to get your car registered in another member state is hindering the good functioning of the internal market,” said Riis-Jorgensen.
“Tax policy must remain a national competence, but it would be useful to establish an EU wide base for passenger car tax schemes. If we want to make it easy for people to move around in Europe we should get rid of this administrative burden," She added.
The average cost of transferring a car to another member state is €350.
The new proposals will see the abolition of national registration taxes over a transitional 5-10 year period, the establishment of an EU-wide system to refund registration tax when a person moves from one country to another and a restructuring of both registration and annual circulation taxes to take account of CO2 emissions.
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