Motor vehicle taxes to be based on emission rates in Turkey

ISTANBUL - Hürriyet

The finance ministry is set to tax cars based on their CO2 emission level. DAILY NEWS photo / Emrah GÜREL

The Turkish Finance Ministry has announced plans to correlate motor vehicle tax rates with emission rates, following the example of German and British models.

Finance Minister Mehmet Şimşek reportedly requested the ministry work on the scheme, which will determine the rates of motor vehicles tax (MTV) and private consumption tax (ÖTV) of cars based on the amount of pollution generated by the vehicle.

“Our objective is not to raise income through tax hikes. The important issue here is to leave a clean environment for future generations,” Şimşek said.

The ministry intends to be fair toward vehicle owners while levying taxes, as well as reducing the level of environmental pollution as responsible citizens, he added. The current vehicle taxes are set on the basis of motor engine capacity and the age of the vehicle.

Taxes relating to these two factors might be reduced in order to set the tax on CO2 emissions higher, according to sources.

The new system will be applied to cars manufactured after the regulation comes into force. Cars entering the market and those already in stock prior to the new system will not be covered by the new legislation.

Europe encourages tax

After reviewing the policies of many different countries in this area, the ministry settled upon the British and German models as leading examples for Turkey to follow.In the United Kingdom, tax charges for vehicles are based on theoretical CO2 emission rates per kilometer, after a 2001 change in the law.

Germany also adopted a scheme in 2009 whereby all new cars are to be taxed according to both engine size and CO2 emissions per kilometer traveled.

Transport is responsible for 29 percent of total CO2 emissions in the 27 countries of the European Union, and EU officials have long been urging member states to implement emissions-based tax systems for vehicles traveling on their roads.