A charge point for electric vehicles at an ABC service station in Ivalo, Finnish Lapland, on 28 November 2023. Two Centre Party lawmakers have floated the idea of creating a mileage-based tax for electric vehicles to compensate for the decline in transport-related tax revenue caused by the electrification of road traffic. (Emmi Korhonen – Lehtikuva)
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THE CENTRE PARTY wants to impose a mileage-based tax for electric vehicles to offset the decline in tax revenue caused by the electrification of road traffic, reports STT.
Markus Lohi (Centre), the chairperson of the Parliament’s Finance Committee, and Eeva Kalli (Centre) call for creation of the mileage-based tax in a dissenting opinion attached to the committee’s report on the car tax act, arguing that also electric vehicle owners should help to cover the costs of developing and maintaining transport infrastructure.
The owners of electric vehicles are not liable for either the fuel tax or the vehicle tax.
“Tax revenue from electric vehicle owners is especially insignificant over the life cycle of the vehicle compared to what diesel and petrol vehicle owners have become accustomed to paying. Partly for this reason, Finland’s total tax rate is set to decline markedly in the coming years,” the duo argued, floating four cents per kilometre as a viable starting point.
The Finnish Information Centre of Automobile Sector (AUT) has estimated based on a survey conducted in 2019–2020 that the mean usage of fully electric vehicles is roughly 23,000 kilometres.
The mileage-based tax should be set at a level that ensures the costs of an electric vehicle remain lower than those of combustion-engine vehicles, Lohi clarified in an interview with STT on Saturday.
“The details should be such that the scheme continues to promote the electrification of traffic. We naturally don’t want to stop that,” he emphasised.
The opinion, he added, should be regarded as an attempt to kindle discussion rather than a finalised proposal.
“This is a cry for alarm about the fact that something has to be done when it comes to taxation so that our economy doesn’t find itself at a dead end,” he said to the news agency. “As the electrification of traffic continues, we have to revise transport taxation. Low emissions are a good thing, but we have to revise the taxation so that our tax revenue doesn’t fall dramatically.”
The electrification of road transport, he highlighted, is progressing at a notable rate: electric vehicles currently account for more than a third of all sold vehicles, and the share could rise to 50 per cent in 2024.
AUT in September reported that electric vehicles accounted for almost 32.5 per cent and plug-in hybrids for 20 per cent of the first registrations of road vehicles in Finland between January and August. It also drew attention to the low demand for new vehicles, estimating that it would lead to the mean age of the vehicle stock rising from 12.9 to 13.5 years between 2023 and 2024.
“The accelerating ageing of the vehicle stock is a challenge to the emission reduction goals set for transport,” told Tero Kallio, the managing director of the Association of Automobile Industry in Finland.
AUT in June estimated that the current pace of electrification will not suffice to reach the national goal of at least halving transport emissions by 2030.
Lohi on Saturday stated that work on the tax reform should be launched without delay.
“If we could start the preparatory work today, we could maybe be able to implement this in the next electoral term. The complete reform should be in effect in 2030,” he said to STT.
Heikki Liimatainen, a professor of transport and logistics at Tampere University, viewed in an interview with the news agency that the tax burden of electric vehicle owners will likely increase as tax revenue from transport decreases.
He stated that electric vehicle owners should contribute toward maintaining the transport infrastructure particularly because electric vehicles, which weigh a lot due to their batteries, put greater strain on roads than many combustion-engine vehicles.
“Overall tax revenue from electric vehicles is very low,” he remarked.
He also expressed his reservation about the notion of levying a mileage-based tax only on electric vehicles as he believes the transport tax scheme should be based on mileage regardless of the vehicle type.
Aleksi Teivainen – HT
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Source: www.helsinkitimes.fi
