Minister Of Finance Introducing A New Tax System For Green Cars

The Minister of Finance, Bjarni Benediktsson, is planning to implement a new tax system for cars that are not powered by fossil fuels, reports Vísir. The first steps towards the system will likely be taken in a year’s time.

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Numerous taxes are levied on vehicles that run on fossil fuels, such as carbon, transmission equalization and car taxes. All the fees generate considerable revenue for the National Treasury, with an estimated income of 37 billion ISK per year.

To encourage more sustainable traffic, however, various exemptions have been implemented for electric vehicles in recent years. Bjarni is now planning on reducing these exemptions.

“We will gradually tighten the conditions as the years go by,” he says, adding that the National Treasury cannot be without the revenue from traffic to cover the maintenance and development of infrastructure.

Bjarni says that the new tax system will happen on stages. “I would like to see the first steps happen hopefully in a year, at the latest in two.”