VDIK and VDA react as WLTP is expected to increase vehicles taxes in Germany
28 March 2017
28 March 2017
Under the new Worldwide Harmonized Light Vehicle Test Procedure (WLTP), official European CO2 emissions test results for the vast majority of model variants will rise, especially those that were tested with limited equipment fitted as standard and/or featured software which cheated the previous NEDC (New European Driving Cycle) emissions tests. OEMs need to brace themselves for the introduction of WLTP in September 2017 but there will also be tax implications if WLTP test results are used instead of NEDC results to determine the CO2 emissions of vehicles and they are taxed accordingly. OEMs are naturally fearful and are already criticising proposals in Germany for example.
In Germany, the Federal Government has introduced a draft bill which amends the Motor Vehicle Tax Law, whereby the new WLTP cycle will serve as the basis for the measurement of carbon dioxide emissions from September 2018 onwards. At a public hearing of the Finance Committee, the Association of International Motor Vehicle Manufacturers (VDIK) announced that this change would lead to an increase in CO2 emissions figures, without efficiency improvements to vehicles. German trade journal Kfz-Betrieb reports that: ′Initial investigations have shown that an average increase in emissions is expected to be 20 percent.’
OEMs anticipate tax rises as a result and the VDIK asserts that the change in the car tax calculations cannot malign new vehicles. The coalition government in Germany has ruled out tax increases in the current legislative period but the VDIK claims that the current plan is a ′tax increase through the back door,’
Kfz-Betrieb further reports that Klaus BrÃ¤uning, managing director of the VDA, the German automotive industry association, told the Frankfurter Allgemeine Zeitung: ′It is not possible to explain why car buyers should pay significantly more taxes for a vehicle that has not been technically altered and thus does not have a worse environmental record.’
Essentially, the VDA asserts that the changeover to using WLTP test results needs to be conducted in such a way that it does not impact consumers. However, with the current proposal, based on a 20% increase in carbon dioxide emissions figures, motor vehicle tax revenues are set to increase by €435 million per annum.
In the UK, new vehicle excise duty (VED) rates will be introduced on 1 April, based on new CO2 emissions bands. The UK Government is expected to adapt the new VED regime to the new WLTP CO2 figures from January 2019. Instead of adopting a complex approach in the meantime, one solution could be the use of a simple conversion of NEDC figures to WLTP figures from September 2017 to January 2019. However, this merely remains a possibility. The VDA states that ′the achievement of the targets in the WLTP cycle requires different engineering measures from those required for the NEDC.’