Parliament Approves Higher Tax on Older Vehicles

Parliament Approves Higher Tax on Older Vehicles


Parliament Approves
Higher Tax
on Older Vehicles

Sofia, November 7 (BTA) - The National Assembly on Wednesday approved a higher tax on older motor vehicles. There will be no tax rebate when a car has been converted to run on liquefied petroleum gas (LPG). The changes were adopted on second reading as amendments to the Corporate Income Tax Act, which imply revisions to the Local Taxes and Fees Act, and will become effective on January 1, 2019.

The tax on passenger cars and trucks with maximum gross weight of up to 3.5 tonnes will be set according to a new formula which includes an asset component and an environmental component. The asset component will reflect the vehicle's horsepower and age, and the environmental component will be determined by the respective municipal council depending on the vehicle's eco category.

The environmental component of the tax formula will entail a tax rebate for owners of vehicles complying with Euro 4 or a higher emissions standard, and a tax burden for owners of vehicles categorized for a lower emissions standard or not categorized at all. The change is aimed to discourage the use of older vehicles because those which are over 20 years old are unreliable, require costly maintenance and cause serious air pollution, the sponsors of the bill reasoned.

For trucks with maximum gross weight of 3.5 to 12 tonnes, the tax will be between 10 and 30 leva for every 750 kg of gross weight and part thereof, instead of every tonne and part thereof.

The opposition BSP For Bulgaria parliamentary group insisted that the amendments concerning older vehicles should be dropped because they would increase the car tax for 70 per cent of car owners in Bulgaria, putting an additional burden on lower-income groups.

The United Patriots urged their senior partner in the ruling coalition, GERB, to reconsider the proposals.

According to Yavor Bozhankov (BSP For Bulgaria), all that the amendments will do is take away more money from the poorest people.

Alexander Ivanov (GERB) explained that these are environmental and health-related measures, not fiscal ones. In Sofia, they will reduce mortality by 750 deaths annually, he predicted.

The legislature rejected a proposal by the United Patriots to halve the tax on vehicles converted to run on LPG.

Another approved change concerns housing. It stipulates that if more than one dwelling has been declared as a main residence, the respective property tax will be due in full for each dwelling. The amendment is aimed to curb the practice of declaring dwellings in various towns as a main residence in order to receive a 50 per cent tax rebate.

The change was opposed by BSP For Bulgaria, who said there are other ways to punish someone for a false declaration. LN/VE

Source: Sofia