The reform of German motor vehicle tax passed today by the Federal Cabinet is a fair compromise that has demanded concessions from all those involved and increased the steering effect of the tax. The VDA welcomes the fact that the reform builds on the existing system and the environmental orientation of the motor vehicle tax.
Until now, German motor vehicle tax has had a limited steering effect, particularly in relation to vehicles’ environmental impacts. The draft passed by the Cabinet now realizes the announcements in the 2030 climate action package that motor vehicle tax would be much more closely tied to the CO2 emissions for passenger cars first registered after January 1, 2021, and an additional incentive for purchasing low-CO2 vehicles would be introduced. In the future it could also be expedient to switch from the outdated parameter of engine size to the vehicle’s pollutant output (nitrogen oxides, soot particles). Then, in addition to taxation purely based on CO2, there would be an incentive for acquiring new vehicles with low pollutant levels.
The projected extension of the period in which electric cars will be exempt from vehicle tax is an important measure for supporting the continued ramp-up of electric mobility. In order to keep up with the other tax incentives for electric mobility, exemption should apply to newly registered electric vehicles up to 2030.