MADRID – Auto makers, consumer advocates and dealer groups are at odds over Spain’s plan to tax vehicles based on the amount of carbon dioxide emissions they produce.
While manufacturers back the revised “registration tax” announced last week, consumer and dealer groups say the new plan will raise overall taxes for new-vehicle buyers and may not achieve the desired results.
Under the Spanish government’s new plan starting in 2008, vehicles producing less than 120 g/km of CO2 will be exempt from the registration tax. Vehicles emitting above that but less than 160 g/km will be subject to a 4.75% tax. That fee rises to 9.75% of the purchase price for vehicles producing between 160 g/km and 200 g/km of CO2 and to 14.75% for vehicles emitting more than 200 g/km.
A spokesman for ANFAC, the Spanish auto makers’ association, says the new tax system is a positive, because more than 1.1 million vehicles will benefit from reduced taxes. Currently, vehicles with gasoline engines displacing up to 1.6L and diesels up to 1.9L are subject to a 7% tax, while all others face a 12% charge.
“The tax reduction will benefit mainly medium- or low-range vehicles, which concentrate the most important part of the demand,” the ANFAC spokesman says.
But Mario Arnaldo, president of consumer group Automovilistas Europeos Asociados, believes the new tax system represents an increase of the total registration tax.
Based on the vehicles registered in 2006, taxes will average 6.6% beginning next year, lower than the current minimum of 7%. But if vehicle prices are taken into account, then the actual amount of money collected could be greater.
Large vehicles emitting more than 120 g/km, which were 8.5% of the total registrations in 2006, are expensive in Spain. A baseTouareg, for example, is priced at about E53,000 ($73,202), including the 12% registration tax and additional 16% value-added tax. The most expensive Touareg reaches E84,350 ($116,507). Those models now would be subject to the 14.75% levy.
Blas Vives, general secretary of FACONAUTO, the Spanish federation of auto dealers associations, is critical of the new legislation, which he sees as a contradiction to the government’s recent action to cancel the 10-year-old “Prever Plan” emissions-reduction program that offered incentives to consumers to replace older vehicles with newer models.
“This system really helped to reduce emissions, scrapping old vehicles with a high polluting level,” Vives says.
He says the new tax system discriminates in favor of SUVs and multipurpose vehicles.
“The new Spanish tax collecting system doesn’t follow the European directives, which recommend to tax fuel consumption, rather than the acquisition of the vehicles themselves,” Vives says.
Recently,Automobiles SpA CEO Sergio Marchione, in his role as president of the ACEA (the European auto makers association), reiterated that a European Union emissions target of 130 g/km of CO2 by 2012 wasn’t feasible.
“The automotive industry will continue to take incremental steps in order to get significant CO2 reductions in the coming years, but additional requirements cannot be implemented before 2015,” he said.