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Compromise reached in road taxThe new draft bill reflects more ecology
18 Aug 2014 Jana Liptáková Business
THE NEW motor vehicle tax will be more ecologically friendly after the Finance Ministry accepted objections to the original proposal from commercial transport firms. The road tax paid by drivers of green vehicles will be lower than originally proposed, and transporters believe the new tax rates will be less discriminatory. The Finance Ministry is currently working on the draft bill of the road tax law, which will unify motor vehicle tax rates in 2015.
“The bill on the motor vehicle tax continues in the legislative proceedings with wording that is finally acceptable to Slovak transporters, and after its adoption it will create better conditions on the market,” ČESMAD, the association of commercial transport firms, writes on its website, adding that the Finance Ministry has accepted all the fundamental objections submitted by the association.
The tax discounts for green vehicles will be extended from the originally proposed six years to nine, while ecological discounts themselves will be extended by 5 percentage points. This means that during the first one to three years, the discount will be 25 percent, and in the next four to six years, it will be 20 percent, and in the period of seven to nine years it will be 15 percent. The discounts will be calculated from the first registration of the vehicle and not the year of manufacturing, as originally proposed. Moreover, discounts will be calculated for months and not years, and the tax duty for buses will be calculated on a daily basis. The more ‘ecological’ rate will reduce state revenues by €13 million. The Finance Ministry originally estimated revenues from the new road tax at €141.413 million for 2015.
The aim of the transporters was to bring road tax rates to the lower levels of neighbouring countries, Pavol Reich, general secretary of ČESMAD, told the SITA newswire. While discounts in Poland are higher, after the road tax in Slovakia is unified, it will be closer to the rate in Austria, but not the Czech Republic.
“Primarily, we fought for the law so that it is not discriminatory, in which we have succeeded,” said Reich.
The Finance Ministry is proposing to unify motor vehicle tax rates in 2015, a break from the current policy whereby regional self-governments set the rates, in an attempt to level the playing field for businesses. Under the proposal, the national tax rate would be comparable to that now seen in The Banská Bystrica Region, which has the lowest rates in the country.
“During preparation of the changes we intensively negotiated with all parties,” Finance Minister Peter Kažimír said, as cited by the TASR newswire. “The aim was to change the system of setting the tax, an ecological approach and especially unifying the rates.”
Radko Kuruc, a Finance Ministry advisor, said earlier in the year that the collection of the tax for the usage of motor vehicles by the state will secure equal rights for all business entities and simultaneously will support usage of green vehicles. Commercial transport firms welcome the proposed change, as they consider the current rates too high.
The motor vehicles tax is one of the issues which ČESMAD and the Slovak Union of Motor Carriers (UNAS) wanted to address when negotiating the new toll scheme with the Transport Ministry. Earlier this year, they sought to reduce the tax to close to the EU average, pointing out that Slovakia’s rate is the second highest, after Ireland. According to ČESMAD, because of the high road tax, carriers from abroad have flooded Slovakia, making it difficult for Slovak carriers to compete. It warned that if the state does not address this issue, Slovak carriers may re-register their vehicles in countries with better conditions.
UNAS, which listed solving the road tax as one of its conditions for withdrawing from a strike, is not satisfied with the bill.
“The state has fallen back in small things; it is only a tiny step,” Milan Laurinec, the chairman of UNAS, told the Slovak Radio in response to the introduced compromise. “We wanted more.”
Some regions are also dissatisfied with the setting of the rates. Bratislava Region, which profits from the road tax the most, claims that the change will cost it €25 million over four years. The collected road tax would be channelled into the state budget. Regional governments would be compensated for the lost revenue by receiving an increased share of the portion of income taxes paid by private individuals.
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