Following the autumn proposal that indicated a rise in the price of vehicles, the state turned the tables and reduced the tax on motor vehicles on the bill in 2021. How much can the best-selling vehicles in Slovenia go up or become cheaper? Interview.
We talked about the issue of changes in vehicle taxes in 2021 Slavko Ažman, who is the head of the working group on taxes in the section on personal motor vehicles, where after the last autumn proposal of the Ministry of Finance stated that cars will be much more expensive. The state eventually overturned the plate, “swallowed” 14 million euros, which would have raised more and more in a vehicle tax proposal two months ago and overturned the plate.
Buy a car in the garage due to bureaucracy and a month or more
How do you rate the final text of the DMV Act? Which sections are you happy with, what should you comment on as a section?
The Motor Vehicle Passenger Section welcomes the government’s review of the Motor Vehicle Tax Act. The law has not yet been passed, but it is very important that it is approved by the National Assembly before the end of this year. Otherwise, the new year would lead to a significant increase in vehicle taxes due to a new way of measuring CO2 emissions. In the public debate on the law earlier this year, we presented a number of comments and proposals to change the law in the section. Most of the comments were about the tax reform’s budget neutrality, the change in combined vehicle taxes, and the increase in electric vehicle taxes instead of the elimination. We are now pleased to note that most of our comments have been taken into account. The new DMV law will provide Slovenia with a modern and comparable European tax law that will help Slovenia achieve its common goals in the field of sustainable mobility, so we want to approve it as soon as possible.
The size of large families: we returned 45 thousand euros to a rich Mercedes
Until recently, the Chamber of Commerce and Industry warned that lower-middle-class vehicles will face much more tax. What exactly has changed?
The Ministry of Finance considered that the new law should be budget neutral. The new version of the law reduced the minimum amounts and increases in individual tax classes accordingly, and in addition eliminated taxes based on the engine power of passenger motor vehicles.
The state transferred 40 thousand euros to a large family
The ministry also says that based on preliminary data on the assessment of the DMV in 2019, the average tax on all new vehicles (including the supplementary DMV) was around 460 euros, and according to the proposal, the average tax will be around 160 euros, which means the average tax liability involves reduction. More than 65%. “What will be the differences in DMV in the cars that sell the most B and C segments? If we illustrate the case of your Polo, Golf, Passat and ID.3 models plastically, how much will the tax change for the benefit of the customer. How much cheaper will they be? For basic customer models?
The new law, as has been said, mainly guarantees that there will be no increase in taxation. I think the statement that the Ministry of Finance will reduce the tax by an average of 300 euros is also true. However, it should be noted that this reduction will be relatively modest for most models. In the lower middle class, the DMV will be ten euros less now up to a maximum of 100 euros, and greater changes can be expected in more expensive vehicles and more powerful engines, which have so far been highly taxed. For the models you are wondering, the new tax will not significantly affect the price. In Poland, the new DMV would be on average three euros higher, the new Gulf tax would be 40 euros lower and the Passat tax would be 100 euros lower on average. ID.3 will not be taxed as an electric vehicle.
Due to a 61 euro tax, I was not allowed to drive the car for a month
What will the new law mean for the resale of diesel, what for HEV, PHEV and BEV vehicles?ᐧ
The new law introduces a higher tax on diesel vehicles compared to petrol cars, although the latest EURO 6d diesel cars are the lowest compared to petrol cars in terms of emissions and environmental impact. However, we estimate that the tax differences are no longer so great that they could jeopardize the sale of new diesel vehicles with a particulate filter and NOx emission reduction system. The law also provides an important incentive for the sale of electric and hybrid vehicles.
How I brought the used car from Germany and where it got complicated
What about imported car taxes?
Imported used vehicles have, in principle, the same scale as new vehicles. As they are older vehicles with lower emission standards, they suffer larger increases in the EURO standard, but for them the percentage of actual tax liability decreases depending on the age of the vehicle. For the most environmentally debatable vehicles with a standard EURO 3 and under, vehicles that cannot be sold in the EU for more than 16 years, the law sets a surcharge of 500 euros for petrol vehicles and 1,000 euros for diesel, but due to the age of import. only 8% of this amount has to be paid – an increase of 40 euros for petrol vehicles and 80 euros for diesel. Of course, this will not prevent the importation of the most controversial environmental vehicles that are being dumped in other EU countries. This solution is certainly not the most thought out.
On average, cars will be much cheaper
They are eliminating the tax on luxury vehicles. What change do you expect?
With the abolition of the motor vehicle tax, which was introduced as a temporary measure in the context of anti-crisis measures, it is approaching the taxation of motor vehicles in other EU countries. This means, of course, the normalization of the market and the elimination of the reasons for the registration of vehicles with more powerful engines abroad. So we hope that we can sell more vehicles like this in Slovenia, and the state can expect DMV and VAT, which otherwise would not exist.
ZPS against lower car taxes
Do you expect new vehicles to be sold next year due to the new tax? Will the plans change?
The market situation is still very uncertain. As you know, car showcases are still closed and sales to individuals are prohibited. In this situation, the outlook is very gratifying, of course, but we can certainly say that the new law is very welcome and will help us in these difficult times. We will really accept it because we certainly cannot increase taxes in the current situation.
Why aren’t cheap cars good news for Slovenes?
What does the change in electric vehicle taxes mean? If you understand them correctly they will not receive any tax. Will this make it easier for Slovenian consumers to switch to electric vehicles?
That’s because electric vehicles aren’t taxed, and that’s great news. Even in the spring, there was a threat of a significant increase in taxes on such vehicles, as we also noted in our section. It is true that the DMV of electric vehicles has not been high even now, but it is certainly a very positive gesture, which shows that the country is committed to promoting sustainable mobility.