ECONOMY

Major changes to road tax system

The road tax system is about to undergo a major change, as will the special levy on cars with engines of capacity higher than 1,926 cubic centimeters. The two plans being considered by the government are based on taxing cars according to their carbon dioxide and other emissions. Plan A would see small cars with emissions up to 150 grams per kilometer paying 1 to 1.50 euros per gram over 100 grams, while bigger cars will be charged 2.50 to 3 euros for each gram of emission over 100 grams. For example, owners of a 4×4 vehicle of 5,700 cc emitting 371 gr/km would have to pay 677 euros, up from the 580 euros they now pay annually. At the same time, the special state levy for a car like the one previously described would rise from about 1,230 euros to 1,354 euros. Plan B is simpler as it lays down a range of emissions corresponding to tax brackets. A car with emissions up to 100 gr/km would pay 30 to 50 euros. For emissions from 101 to 120 gr/km this would rise to 100 euros, for 121-150 gr/km to 200-250 euros and for vehicles emitting 200 gr/km or more the tax will range from 500 to 1,000 euros. These changes may be combined with the withdrawal of old-technology vehicles that are heavy polluters. The new system is likely to go into effect from November, that is, in time for the road tax payment due for 2010. Nevertheless, a senior official at the Finance Ministry has indicated that the government is not considering, at least at the present time, a combination of vehicle withdrawal with the new road tax system. Meanwhile, the board of the Association of Motor Vehicle Importers-Representatives (SEAA) will meet in the next few days with ministry general secretary Thanassis Skordas to propose a small levy on cars emitting CO2 up to 100 gr/km and then a uniform charge of one euro per gr/km. SEAA supports the shake-up in road taxation so that charges correspond to emissions rather than engine size, following the example set by another 16 European Union states.