Encouraging honesty
The Finance Ministry has defended the new taxing system for cars it hopes to introduce this summer. It would replace the current excise tax on the declared cost of the vehicle with a charge on first registration of zł.1 per cubic centimeter of engine capacity. This rises to zł.4 for each cubic centimeter of engine capacity for vehicles that fail to meet European emission requirements.
Dealers are hoping the change will stimulate new car sales. Figures for January show that year-on-year sales are down by 23.7 percent, while sales have fallen 5.6 percent since December.
Deputy Finance Minister Jaroslaw Neneman says the main reason for doing away with the old regime was that it encouraged dishonesty. "The present system encourages them not to be honest. So the new tax will not depend on declared price but on other factors, such as engine size and emission standards, which are set factors."
Wojciech Drzewiecki, founder of the Samar automotive research company, said: "This is a step in the right direction. Importers have been reporting much lower values than the real value to evade tax and consequently reducing revenues for the Treasury.
Some analysts would have preferred to see all drivers paying an annual fee of zł.100-200 linked to emission inspections.
Neneman concedes that an annual fee system would have many benefits. "In my opinion the yearly fee would be the best solution because the fee would be small, such as E50 (zł.200). The amount of the fee would depend on emissions, which is excellent. There are two main problems though. The administrative cost would be high because the tax is low and widespread. The second argument is that society will think of it as a new form of taxation. Once we have everything computerized it would be simpler, say in two years' time, but at the moment the system we are proposing is better."
Dealers are hoping the change will stimulate new car sales. Figures for January show that year-on-year sales are down by 23.7 percent, while sales have fallen 5.6 percent since December.
Deputy Finance Minister Jaroslaw Neneman says the main reason for doing away with the old regime was that it encouraged dishonesty. "The present system encourages them not to be honest. So the new tax will not depend on declared price but on other factors, such as engine size and emission standards, which are set factors."
Wojciech Drzewiecki, founder of the Samar automotive research company, said: "This is a step in the right direction. Importers have been reporting much lower values than the real value to evade tax and consequently reducing revenues for the Treasury.
Some analysts would have preferred to see all drivers paying an annual fee of zł.100-200 linked to emission inspections.
Neneman concedes that an annual fee system would have many benefits. "In my opinion the yearly fee would be the best solution because the fee would be small, such as E50 (zł.200). The amount of the fee would depend on emissions, which is excellent. There are two main problems though. The administrative cost would be high because the tax is low and widespread. The second argument is that society will think of it as a new form of taxation. Once we have everything computerized it would be simpler, say in two years' time, but at the moment the system we are proposing is better."
