A new car tax will be launched soon: plans are not abandoned in the fight against the crisis

There are no planned changes

The entry into force of this tax was decided in December 2019. It was originally planned to take effect in January 2020, then, in early April, its date was finally postponed to July 1 to give more time to prepare for its administration.

Now, less than a month before the date to change the driver or re-register a car, depending on its CO2 emissions, the country’s authorities do not intend to abandon the introduction of a coronavirus disturbance tax.

Head of the Strategic Communication Division of the Ministry of the Environment. Specialist Raimonda Karnackaitė said that only the legislator (Seimas – ed. Past.) Could change the date of entry into force of the law, but noted that, as expected, the Motor Vehicle Registration Tax Law will enter into force on July 1 and will be administered by SE Regitra “.

Admittedly, Regitra’s representatives told the editorial board when asked about the immediate plans, but added that the institution would be ready to work on both cases, even if it had been decided to postpone the law’s entry into force.

“Our goal is to ensure smooth collection (registration tax) from the state budget and the simple provision of services to customers.

Meanwhile, decisions on the effective date of the tax can only be made by lawmakers. We are ready to work on both cases, “said the responses.

I see nothing wrong

Delfi asked my economists Žygimantas Mauricas and Nerijus Mačiulis about the emergence of such a tax in the current context, when the economy is not experiencing its best times.

The latter assured that this tax will not yet affect those most affected by the crisis or those who may lose income.

“Still, we’re talking about newly registered cars, so those who have lost income doubt their economic prospects, they probably won’t change the car, they won’t buy a new one, and they won’t be affected by that tax.”

The only nuance in this context is that this tax will probably raise less money than planned, as there are likely to be fewer new or re-registered cars than last year, but there is probably nothing new here because all taxes will be collected less, ” said the economist. .

Speaking about tax cuts, he argued that more thought should be given to the changes that affect low-income and low-income people the most.

“The registration and re-registration fee is not the most relevant for those with the lowest incomes, those who use public transportation.

Furthermore, it is not a regular annual fee, but is paid only when the car is registered or re-registered, so those who do not want this rate to be touched will not be affected, ”he said.

One hand will give, the other will take, but we can decide

Economist Sigismund Mauricas argued that the tax could not be seen as completely new in this context, as an attempt was made to introduce it in 2018, but added that if the public interpreted it this way, there could not only be significant dissatisfaction but also a drop in consumer confidence. institutions.

“Still, it is a procedural decision, but I would add kerosene to the fire and the real question is whether now is really the right time (entered) right now,” he said.

On the other hand, according to him, Lithuania will have to move in this direction sooner or later, but a lot also depends on how said tax introduction will be presented.

“That tax must be somehow well packaged for the public.

As an example: “We increase the amount of tax-free income (NPD), we pay benefits to children, people of retirement age, but at the same time we introduce that tax because the European Union (EU) requires it, our attention for the future, health problems, because Lithuania, let’s not be afraid has become a dump for old cars and diesel. “

If packaged well, the fee will be very small and one-time payments will be higher than that fee, “he said, adding that he supported the introduction of this tax.

When asked if the tax, which will be introduced as of July 1, will no longer empty the pockets of the already incomplete population, the economist explained that it will affect few.

“Those high-income people who bought more expensive but powerful cars, their pockets may be empty, but for good purposes, and those with the lowest income are likely to receive other, higher support, ie, child benefits, retirees. NPD reduction.

Well, it will occur to them that one hand will give, the other will take, but one person has a choice, they cannot buy a car or buy a greener car that is not on the tax radar, “he said.

Called a meaningless tax

And Matas Buzelis, the communication manager for Autoplius.lt, said he had absolutely no understanding of the meaning of such a tax.

“I am skeptical about the introduction of a car registration tax due to a fundamental flaw in that system.

Even if the economic situation had been better, this measure is too weak to change drivers’ choices or encourage cleaner cars. It is more like an ordinary toll.

There is a need to communicate higher on exactly how the funds raised will be used: how the money raised will clean up the extremely inert Lithuanian car market, ”he said.

According to the head of communication, the worst thing is that small car sales companies and low-income residents will suffer more from such a system.

“Interest in old diesel cars will wane, it will be extremely difficult to sell. Owners of such cars will either have to sell their semi-powered vehicles or will have to operate them while driving.

This is due to an excessive step between the value of the car they own and the price they intend to buy. 1000 Compensation for a destroyed vehicle also saves little in this area, as such cars (used or destroyed) can be worth a similar amount, ”he said, saying he did not know whether the tax should be postponed or adjusted at all.

“In an ideal world, such a useless tax should be replaced by a regular periodic pollution tax, which is the only way to change buyer behavior. It was recommended to start from there.

If the money raised from registries is used to promote the sale of less polluting cars, that’s great, but it’s unfair to harm all commerce. After all, a person who replaces 5 cars a year for fun doesn’t necessarily pollute 5 times more, ”said M. Buzelis.

He said the introduction of the tax in July and June is likely to slightly affect the used car market.

“Drivers will rush to sell their cars and buy the ones that will be taxed the most starting July 1. A new car tax: coming soon: plans to combat the crisis are not abandoned

“There should not be a massive change in prices; the seller may have a greater bargaining advantage at the time of purchase in cases where it is considered a more polluting car,” he said.

Informed about the order

Regitra announced the appearance of the car registration tax that will soon be introduced in a press release.

He stated that the tax would apply to passenger cars and light commercial vehicles, depending on the type of fuel and its combinations, and would emit more than 130 g / km of CO2.

It will be charged when registering the car for the first time. In other words, when you want to register a new or imported car. Also in cases where the driver of the car changes.

For example: a car previously operated in Lithuania is registered in the name of another driver, the right to drive the car is granted to another person based on a long-term lease, etc. The fee also applies to the re-registration of a vehicle after its withdrawal. The most common case is when the temporary registration period expires.

Read more about how CO2 will be measured and how the tax will be charged more here.