Environment Ministry has proposed two taxes aimed at reducing pollution from cars. A one-off levy would apply to cars first sold in Lithuania, while another tax would be paid annually.
The first levy is a reformed version of the current registration tax and, according to Environment Vice Minister Gintare Krusniene, will only be paid on cars imported to Lithuania registered for the first time.
“We are changing not only the content of the law, but also its name, from registration tax to pollution tax,” she said.
According to Krusniene, the current registration tax, which has been in effect for a year, does not encourage people to switch to less polluting cars.
“One of the key changes is that we are going to tax only cars imported to Lithuania, upon the first registration, and will waive the transaction tax for domestic transactions,” Krusniene said.
Another levy, a user tax, will be paid on all cars annually and its size will depend on CO2 emissions, according to Krusniene. Under the plan, it will come into effect in 2023.
The reform of car taxes is aimed at encouraging people to pick at least 30% less polluting vehicles and halving the current 70% share of diesel cars.
Both the registration and the annual pollution tax will be calculated under the same formula, which uses the CO2 emissions in grams per kilometer and the air pollution coefficient.
According to the Vice Minister, to goal is to discourage imports of old and polluting cars.
The bill offers exemptions for large families, drivers over the age of 65 and other groups, and also sets a transition period for all drivers who bought their car before 2020.
The taxation changes would apply to passenger cars owned by both individuals and organizations. (LRT/Business World Magazine)
