The board of the populist and nationalist-oriented Finns Party has published a resolution saying it will campaign to do away with Finland’s car tax during the next parliamentary term.
“Finland has one of Europe’s oldest vehicle pools. We can’t go on like this, we must make a change for the better,” the Finns Party board wrote in its statement Saturday.
The party justifies the proposal by saying that making newer car models more affordable would speed up the renewal of the country’s motor vehicle population and therefore increase automotive safety and mitigate the environmental damage caused by older cars. At the end of 2013, the average age of passenger cars in use in Finland was 11.2 years.
The Finns Party has appealed for Finland’s other political parties to join them in support of the proposal.
How the car tax works in Finland
Three different taxes are levied on vehicles used in road traffic in Finland. As a rule, these taxes are collected by the Finnish Transport Safety Agency Trafi.
First there is the vehicle tax, which is a base tax based on the vehicle’s CO2 carbon dioxide emissions data reported by the manufacturer. Older vehicles are taxed on the basis of their total mass. This base tax amount is combined with a tax on ‘driving power’ for vehicles that operate on something other than petrol, a group including some passenger cars and most lorries.
The second tax is a car tax that must be paid on cars imported to Finland prior to their first registration. This tax also applies if the structure, purpose of use or ownership of a vehicle changes in a manner that would make a vehicle subject to the car tax.
Lastly, there is the fuel fee, concerning the use of fuels that are taxed less than petrol or diesel, as well as the use of certain gaseous fuels in vehicles, as laid down in the Fuel Fee Act.
High costs prohibit the purchase of new cars
The car tax makes the price of motor vehicles significantly higher in Finland. In 2012, the car tax's share of an average passenger car with average emissions was about 25 percent of the retail price. Add this to the 24 percent value-added tax that all motor vehicles and fuels are subject to and you have in effect a near 50 percent price increase.
The Finns Party says the current tax system encourages people to use old motor vehicles. About 13 percent of the motor vehicles registered in Finland in 2012 still had no catalytic converter. In 2009, the average age of all motor vehicles registered in the EU was 8.2 years, or about three years less than in Finland.