Denmark to tax cars at just 100%
The capital city of Denmark, Copenhagen has a reputation as a cyclists’ paradise and it isn’t just due to a lack of hills.
Registration duties for cars can be up to 180 percent, which means Denmark is one of the most expensive countries in the world, in which to buy a new car.
That may be about to change, as new proposals unveiled on Tuesday September 5, 2017, the tax rate is to be lowered dramatically to just 100 percent.
Many would view 100% tax on cars as exorbitant but when one considers that it could be almost double that, it doesn’t sound too bad from a Danish point of view.
The initiative to lower the tax is part of efforts by Prime Minister Lars Lokke Rasmussen’s center-right government to expand the labor force by making a monthly salary more attractive.
At the moment, the cheapest version of Volkswagen’s Golf hatchback, the 85-horse power 1.0 TSI trendline, is advertised on the car-maker’s Danish website with a starting price of almost €28,500. That compares with about €18,000 in the car maker’s home of Germany and as little as €15,800 in nearby Poland.
A basic Porsche 911 Carrera sports car will set you back as much as a one-bedroom apartment in the capital — €257,000 versus €98,000 in Germany.
To the delight of motorists, the government has published a list of potential savings, should its plan be approved by parliament.
It shows savings of around 7 percent (or 2,716) for a Golf and of as much as 12.1 percent (€7,461) for the Passat, a family saloon.
“We will still have some of the highest car prices,” Economy Minister Simon Emil Ammitzboll told a press conference in Copenhagen on Tuesday. At the same time, it’s “not fair that we, living in one of the wealthiest countries in the world, are driving worse cars than our neighbors in Sweden and Germany.”
Denmark started raising their import duties on cars at the beginning of the 20th century and raised them significantly after World War II and then again after the oil crisis of the early 1970s. It was an easy target for filling the state’s coffers.
Like Ireland, Denmark doesn’t have a car industry of its own, so previous governments had opted to apply different duties, depending on how much the cars pollute.
The current administration in Denmark had decided to phase out tax breaks on electric cars, citing budget constraints and the desire to level the playing field. That decision was delayed in June amid a dramatic drop in sales of Electrically Chargeable Vehicles (ECVs).
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