Vehicle registration fees should be dropped, economist says – The Post

Vehicle registration fees should be dropped, economist says

Head of the environmental economic council says that implementing a ‘pay as you drive’ system would make more sense than Denmark’s sky-high registration fees

March 5th, 2013 10:06 am| by admin

The head of Det Miljøøkonomiske Råd, the environmental economic council, said that the nation’s costly vehicle registration fees should be dropped in favour of a road use system.

"We believe that the registration tax should be abolished and replaced by road pricing,” Hans Jørgen Whitta-Jacobsen, a member of the council and professor of economics at the University of Copenhagen, told Politiken newspaper. “The current car taxes are too high and poorly designed.”

Whitta-Jacobsen said that vehicle taxes should be about half of what they currently are, and that registration taxes should vary based on properties like use, weight, engine and the overall size of a vehicle. The bigger the car, the higher the fee.

The registration tax on a regular car is 105 percent of its value up to 79,000 kroner, and 180 percent of the remaining value. On top of that, vehicle owners pay a bi-annual charge of at least 290 kroner and up to as much as 10,080 dependent on the vehicle's fuel efficiency. The taxes for diesel cars range from 120-15,090 kroner. 

Whitta-Jacobsen believes that road pricing – charging fees and taxes based on how much and where a vehicle is driven – is a more efficient way of levying tariffs on cars.

"Car taxes should shift from taxing purchases to usage,” he said. "It is a car’s use that gives rise to the problems of congestion, accidents, pollution and noise.”

He also suggested that taxes on CO2 and other emissions should occur at the petrol pump and not via registration and ownership duties as they are now.

Whitta-Jacobsen said that the high taxes levied on new vehicle purchases encourages owners to hang onto petrol-guzzling polluters for too long, and discourages them from buying newer, safer, more technologically-advanced and cleaner vehicles.