State revenue losses from owners of expensive vehicles who have not paid their road tax come to an estimated 95 million euros per year. Many cars with engines of 2,000 liters or more have been taken off the road and their plates submitted to authorities to avoid having to pay the tax, while a number of such vehicles have been exported to other countries.
Given the above, the government’s considered 30 percent increase in the luxury tax, which would further raise the cost of use for the owners of such vehicles, is likely to lead to many of them ridding themselves of such costly assets.
The Association of Car Importers-Representatives (SEAA) argued on Wednesday that it is highly likely that not only will the government fail to collect the additional 20 million euros it is hoping for, but it may also incur further revenue losses.
At their current levels, the luxury tax and the generally high taxation on vehicles have led to a massive number of plate submissions as well as thousands of car exports mainly to Eastern European countries, while some owners who are desperate to avoid the tax burden are selling their originally expensive cars for as little as 3,000-5,000 euros.