The Government of Spain is working on reforming the taxation applied to automobiles, for which it has consulted with the employers’ associations ANFAC, FACONAUTO, GANVAM and SERNAUTO. In short, they ask to increase taxes on the most polluting cars and reduce them to electric ones.
Undoubtedly, owning a car is a great expense when it comes to taxes. As we saw in a previous article, we pay taxes for its purchase, for its maintenance, for its fuel or electricity when charging it, for insuring it, for the mere fact of having it registered, etc.
The motorist is surrounded by direct and indirect taxes. It is shown that tax policy has a huge influence on the buying habits of citizens, since they try – by common sense – to pay the minimum possible to the public coffers, whenever that is possible.
The Government of Spain, made up of PSOE and UP, is not fooling anyone if it gets its hands on current taxes and reforms them. I was on their election shows, although the two parties of the coalition have different recipes to face the reforms. The Ministry of Finance has asked the employers for their opinion, and they have responded.
Of all the cars in Spain, owning an electric car represents the greatest possible savings in taxes as things stand.
Let’s see what they have raised to the Government, briefly:
- VAT: As long as the European Union does not change the corresponding directives, they ask for the reduction or elimination of this tax based on the environmental characteristics (come on, electrical and plug-in)
- IVTM: Increase the possible bonus from 75% to 100% for this type of vehicle
- IEDMT or IM: Replace the registration tax (since 2008 based on homologated CO2) by another environmental tax that takes into account, in addition to CO2, the age of passenger cars
- Personal income tax: That the aid of the MOVES or Renove plans, as well as deductions for the purchase of new cars and deductions for remuneration in kind of efficient vehicles, are not counted for the Income declaration (as any subsidy received, capital gains)
Burnt euro banknotes – Photo: Iesum (Flickr) CC BY-ND
- Corporation tax: Recover the 10% deduction for investments in low-emission vehicles (abolished in 2011)
- Electricity tax: A reduced rate for charging stations
- IAE: bonuses for the distribution of vehicles (dealers) to offset the cost of the charging points they are financing
- ITP: homogenize the cost of vehicle transfers, taking into account age and also emissions
- Other taxes: in general, reduce the burden on companies to facilitate the transition to clean cars, as well as the value chain of the sector
Mercedes-Benz EQC, the typical electric car that the average Spaniard will not be able to buy for years (used)
These measures are adding to the growing tendency to point out to the motorist who does not make the leap to new technologies for whatever reasons, and that keeps an older vehicle in better or worse condition. The average age of the car park has exceeded 13 years, and it has become a chronic problem in our country.
The point is to embrace the mantra that older vehicles are more polluting and more unsafe, and that for the wheel of the sector to continue turning, it is necessary for scrap yards to receive more vehicles from definitive retirement and to sell more new vehicles. In other words, incentivize buying and not keeping.
There are many ways to penalize the car, but to attack the age of the vehicles, as is done in practice in Japan (through the harsh ITV called shaken, very difficult to pass with models older than 10 years), has a positive effect on the annual sales volume. But for that the consumer has to be able to afford it, of course.
Tesla Model S in Amsterdam – Photo: David van der Mark (Flickr) CC BY SA
Could the bonus / malus model work in Spain?
We have seen that several countries in Europe give so much facilities to electric vehicles and put so many loads on conventional ones, that the former begin to impose themselves or unnaturally increase their sales rate. If the policy were more neutral, people would buy more what they want, not what is convenient for them for taxes.
If the possession of the oldest vehicles is difficult – without becoming historical, 30 years or more – the citizen should be given the maximum facilities to change cars. If not, let’s go to an elitist model in which fewer and fewer people buy new cars, and the less well-off are forced to give up their vehicle or drive in dangerous situations for everyone (no MOT, no insurance, with loads …).
The automobile is one of the goods most punished at the fiscal level by the different public administrations. Since Spain is the second largest European automobile producer and the ninth in the world, the Government must be cautious, or by squeezing the goose that lays the golden eggs, the collection may fall instead of grow, which will be counterproductive …