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Annual Car Tax to be Emission-Linked

The government is preparing reforms to car taxation which would take the vehicle's emission levels into account. The change is set to take place in around two years.

Currently most car owners pay a vehicle tax of 130 euros a year. Under the planned model, the owner of a small car with low emissions would pay 50 euros.

The fee for cars with a 1.6 litre engine would be 100 euros, for a two-litre diesel engine it would be 85 euros; an urban SUV would be somewhat more expensive. The owner of a four-wheel drive SUV with a large petrol engine would be hit with an annual 325 euro car tax.

Two thirds of Finland's cars would fall below the 160-euro level.

Car dealers hope that decisions on new car taxes will come soon, as uncertainty is having an inhibiting effect on sales.

Finance Ministry civil servants are working on details of the plan. A final proposal on the tax levels will be made by Minister of Finance Jyrki Katainen.

Finland is one of the last old members of the European Union not to take emissions or fuel consumption into consideration in car taxation.


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