The first tax reform of the new government is about to bring to parliament will change the way the road tax is calculated. Since the 1960s or even before, when some government bright spark devised the Greek Taxable Horsepower scale, passenger vehicle owners in Greece have been paying taxes – car registration and road tax and more recently, additional income tax as cars are part of the calculation of nominal taxable income (another great Greek invention) on the basis of their car’s engine capacity.
This is going to end from next year. The government, in a new bill, is proposing to impose taxes based on the manufacturer’s price of cars in the same way insurance companies use car values to estimate replacement costs.
Registration tax will in fact draw on the existing insurance database of car values instead of the present method that puts the same tax on an expensive turbo charged sports car and a family hatch with the same engine capacity
The road tax for newer cars is currently calculated on the basis of emissions. Oddly enough, cars older than four years, and potentially more polluting, still pay road tax on a scale calculated to according to taxable horsepower (which is related to engine capacity – not power output).
Nominal income: again possession of a car adds to a Greek taxpayers tax bill. The amount of tax paid is related to engine capacity – the mysterious taxable horse power – and not the commercial value of the car. So even if the government do not abolish this ridiculous system of calculating income, as they have promised to do, the changes will redress some of the unfairness of the system where expensive cars are taxed the same as cheaper models.
The new road tax plans to expand the use of emissions criteria to older cars to promote newer less polluting technologies.
The bill is also making provision for an electronic system of checks to identify uninsured drivers and vehicles without MOT.
