The persecution of fossil fuels continues and the latest report from the group of experts on the tax reform that the Government of Pedro Sánchez wants to implement confirms this.
The call White book on the tax reform that the Government of Spain wants to undertake suggests significant taxes on fossil fuels, which is in line with the repeated persecution of this type of energy by public bodies with the ultimate goal of promoting electric cars.
If confirmed, this would have a direct impact on the already battered economy of more than 90% of Spanish drivers who still use vehicles powered by a combustion engine.
The group of experts estimates that light vehicles could pay one cent per kilometer of road use and heavy vehicles three
And it is that, to the hair-raising rise in gasoline and diesel prices as a result of the pandemic, the geopolitical tension and, finally, the russian invasion in ukrainean increase in taxes would be added.
The proposals of the group of experts
Specifically, the group of experts made up of professionals with a professorship in Economics and Financial and Tax Law -and who have been in charge of preparing the report on tax reform proposals-, suggest equalizing the taxation of diesel and automotive gasoline.
Currently, a liter of diesel is taxed at 0.379 euros per liter, while gasoline has increased its final price by 0.474 euros per liter. This means that, if equal, diesel would rise by 9.82% its price to match the taxation of gasoline.
In the committee’s opinion, the fact that 26.9% of greenhouse gases are generated by road transport is partly a consequence of “Inadequate tax action in this area”including “the reduced level of the excisa applied to automotive diesel in relation to gasoline”.
According to the forecast of the report, these measures would translate into an increase in the collection of the State of €884.08 milliondespite the fact that demand would drop by 1.97%, according to calculations.
More taxation
However, the report is not satisfied with an increase in the taxation of automotive fuels, but also proposes “a general increase in the taxation of hydrocarbons” to deal with “the difference in excises on fuels with the average levels of the EU-27”, a fact that they affirm hinders the ecological transition and that, furthermore, “barely cover 60% of said external costs (without incorporating those associated with infrastructure )».
This would result in the establishment of a price of 50 euros per ton of CO₂, which would imply a additional increase of 0.514 euros per liter in the two fuels before taxes. As a result, Spain would be in the high rank of the countries that charge the most for refueling vehicles, especially diesel, acknowledges the document.
Definitely, the total increase would be 29.19% for diesel and 15.47% for gasoline. This, according to the average prices as of March 4, 2022, would place the amount of both fuels at 2,034 and 1,939 euros per liter, respectively.
In total, the State would collect 2,515.11 million euros more for the first and 1,043.03 million for the second, predicts the report.
Highway tolls
The report also refers to the proposal to charge for use on the roads. Specifically, it recommends “consideration of tax mechanisms for payment for the use of certain road infrastructures”which also admits that “it is subject to legal, economic and environmental debate.”
However, it clarifies that “vignettes and distance-based payments apply in the vast majority of EU member states”an option that he defends by recalling that these taxes can be measured “by electronic devices”.
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Specifically, the group of experts estimates that light vehicles could pay a cent per kilometer and the heavy threewith which the Administration would collect 1,172.8 million a year (799.78 would be contributed by cars and 373.04 by industrial ones), not far from the 1,241 million euros that have been allocated to road maintenance in the General Budgets of the State.
The second estimate sets the payment for trucks at 4.9 cents, since it states that they are 4.9 times more damaging to infrastructure than cars.
In addition, the report considers that the costs for society for the use of the vehicle, including congestion, pollution (local and global), accidents, noise and the cost of infrastructure, amounts to 31,733.45 million euros, for what it sees possible get those “potential income from the tax on the use of a vehicle”.
Of course, the document does not refer at any time to the direct and indirect benefits provided by the automotive industry.
registration tax
The tax associated with the purchase of new vehicles would also be subject to reform if the proposals made in the White Paper are approved. This establishes three alternatives:
- Change the tax brackets to encourage the purchase of new low-emission vehicles, exempting those that emit less than 127 grams of CO₂ per kilometer (currently the limit is 120). Of course, a 5% tax would be applied up to 155 g/km (now they pay 4.75%); 10% between 152 and 175 g/km (now most pay 9.75%) and 15% would be awarded to buyers of cars with more than 175 g/km. In addition, an additional charge related to the weight of the vehicle would be applied (10 euros for each kg.)
- Vehicles that emit less than 55 grams of CO₂ per kilometer and those who exceeded that limit would pay 5% of the price of the car up to 127 g/km. The following sections would pay 10% (between 128 and 152 g/km), 15% (153-175 g/km) and 20%.
- apply a rate of 33 euro cents per gram of CO₂ up to 86 grams per kilometer, at 20 euros per g/km between 86 and 111 g/km, 44 euros between 112 and 155 g/km, 72 euros between 156 and 172 g/km and 144 euros for those over 173 g/km
The experts selected by the Treasury have also proposed changes in the road tax annual and advise that it cease to be linked to the fiscal horses of the vehicles so that the rate is also associated with the environmental regulations of energy efficiency or the labels of the DGT.
Source: RTVE