The recently-unveiled vehicle registration and 'annual circulation' taxes are supposedly based on the 'polluter pays' principle, but this couldn't be further from the truth.
This new system is the equivalent of taxing households based on the average energy efficiency of their electrical products rather than taxing actual electricity consumption. This means that people who, for example, wish to buy a high-emissions car to use only at weekends would be payng substantially more in taxes and licences than those who drive low-emission cars several times a day, despite the latter clearly doing more harm to the environment.
The system is discriminatory even if two people own the same vehicle. Let's say the yearly licence fee is €400. The first person is a businessman who commutes to work every day and spends €40 a week on petrol. The second is a pensioner who only uses the car once a week, and spends €5 on petrol.
The former would be paying a total of €2,480 in fuel costs and licence fees a year, while the latter would be paying €660.
This means that while the businessman is harming the environment eightfold relative to the pensioner, his costs are only 3.75 times that of the pensioner.
The new licence fees also make buying a new vehicle unfeasible. Let's say a person owns an 18-year-old 1.3-litre petrol car that emits 150 g/km in CO2 (a very conservative guess). Under the new regime, in a 10-year period, the licence fees would amount to €1,020 (€102 a year).
On the other hand, a new low-emission vehicle (100g/km or less) would cost €1,263 in licence fees for the same period. Even without taking into account the actual costs of buying a new car, a low emissions vehicle will therefore still cost you more than keeping your old car.
The solution is therefore to do away with the registration tax and current licence system, and charge drivers according to the amount of CO2 emitted by their vehicle every year. This would entail recording the mileage of the car every year, multiplying the number by the car's CO2 emissions figure.
The tax would be progressive, similar to that of the new electricity tariffs, meaning that the more CO2 one emits, the more one pays on a per-gram basis. To quantify: two million grams of CO2 emitted in one year would cost, for example, €100 (€1 per 10,000 grams), while two million grams would cost €250 (€1 per 10,000 grams on the first million, and €1.50 per 10,000 grams for the second million).
Unfortunately, a fixed cost based on engine cubic capacity would still have to be imposed on pre-1997 vehicles, since the CO2 figures for these cars are not available. Secondly, it would also make sense to charge a higher per-gram price on cars older than five years, since as the car ages it naturally starts emitting more CO2.
This system is not without its faults. There is such a thing as odometer fraud, or messing about with the clock or the car's mileage.
However, there are many ways to prevent this: mainly, the mileage on the odometer can be compared with the mileage noted on maintenance and VRT records. Secondly, if the odometer is an analogue one, crooked numbers or gaps could mean that it has been tampered with.
Thirdly, one could compare the yearly mileage records and see whether there is a major discrepancy in the numbers.
If abuse is still rampant, the government could install so-called odomoter trackers, which are already available on the market.
All in all, this system is fair, as it rewards people with environment-friendly vehicles who drive short distances while it punishes people who drive long distances with gas-guzzlers.
On the other hand, the new system unveiled by the government rewards and punishes people on the basis of what car they own, rather than what they do with it.