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Cyprus

DIKO proposes ‘fairer system’ for road tax

By Evie Andreou

THE Democratic Party DIKO has tabled a bill to parliament that provides for the replacement of road tax with an additional charge of nine cents per litre on fuel consumption tax.

According to the proposed bill, road tax will be enforced through the taxation of motor fuel; a multiplication of fuel consumption with nine cents per litre, plus VAT.

DIKO MP Antonis Antoniou said that their suggestion is based on EU proposals for calculating road tax based on the emission of pollutants, as well as the gradual abolition of road tax.

“It is obvious that those who use the roads more often and consume more fuel will pay more road tax,” Antoniou said.

The existing system of road tax enforcement, he said, is complex.

“DIKO’s proposal introduces a simpler and fairer system on charging fees, based on the principle that the polluter pays,” he said.

As regards to the advantages of the proposed system, DIKO argues, the existing complex calculation system of road tax will be repealed while introducing a more simplified and fairer progressive payment system of road tax on vehicles, which will reflect the damage caused to the environment from the use of vehicles, and is based on ‘the polluter pays’ principle.

In addition, with the new system, vehicle use is taxed accordingly, while users will pay the amount allocated to them based on the actual fuel consumption of their vehicles.

“It introduces a more favourable treatment of vehicles with more efficient engines, resulting in the gradual reduction of CO2 emissions, with huge benefits for the government and the environment. Moreover, more favourable conditions are created for the registration and circulation of vehicles with lesser fuel consumption and consequently, reduced emissions,” the proposal stipulates.

The proposed measure will also help diminish “the serious problems created from the huge accumulated civil debt created by the cancellation of registration of motor vehicles due to non-payment of road tax for three consecutive years, and with the circulation of vehicles with unpaid road tax”.

With the current system, it said, those who pollute more pay the same road tax with the other vehicle owners as there is no variation in relation to use and the distance travelled by a driver.

One of the downsides, DIKO argues, is that professional groups, that make constant use of vehicles and therefore consume more fuel, may pay more road tax, compared to the existing system.

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