PROVISIONAL VEHICLE. REGISTRATION DATA. ITV CODES. Ministerial Order: 2008 prices. Registration date. Type of registration. Origin. Service. Type of ...
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Amadeo Fuenmayor Fernández
AUTOMOBILE TAXATION IN SPAIN. RECENT REFORMS AND FUTURE PROPOSALS 1
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IS IT AN ENVIRONMENTAL REFORM NEEDED?
The actual Spanish CO2 emissions are very far from the Kyoto’s Spanish commitment: Spanish Commitment with the Kyoto Protocol: an increase of 15% from 1990 levels. Spanish Goal (Plan Nacional de Asignación 2008-2012, R.D. 1370/2006, de 24/11): the 2008-12 average below an 37% increase over base year. The excess over the Kyoto Protocol:
2 percentage points: sink activities 20 percentage points: Flexible Mechanisms (Clean Development Mechanism, Joint Implementation, and International Emissions Trading)
The transport sector is one of the main factors explaining the distance between actual emissions and the Spanish Commitment:
Transport sector play an important role in emissions, not well monitored Recent evolution in transport sector worsens.
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SPANISH GREENHOUSE GASES (GHG) EMISSONS
Percentage over base year (1990) levels
170 160 150 140
137
130 GHG Emissions 120
Kyoto P. Commitment
117 115
Sink Activities
110
Flexible Mechanisms 100 2000
2001
2002
2003
2004 2005 Year
2006
2007
2008
2009
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GHG EMISSIONS BY SECTORS. SPAIN, 2009 Others 16%
Road Transport 24%
Waste 4% National Aviation 2% Ship Transport 1%
Agriculture and Cattle Rising 11% Cement 3%
Electricity 19% Industry17%
Oil Refinery 3%
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EMISSIONS’ SHARING BY SECTOR. SPAIN, 2006-09 30,0%
25,0% Road Transport National Aviation
Relative weight
20,0%
Ship Transport Electricity
15,0%
Oil Refinery Industry
10,0%
Cement Agriculture and Cattle Raising Waste
5,0%
Others 0,0% 2006
2007
2008 Year
2009 5
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WHAT COULD WE DO?
Ways of reducing emissions: Rise
in vehicle efficiency:
EU’s
target for all new passenger cars: 130 CO2 gr. /km. by 2015, Spain: 1st quarter 2010: 139 gr CO2/km.
Lowering
the use of vehicle
Taxes could be used to influence these two aspects, through the acquisition of cleaner vehicles and the reduction in their use.
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TAX COLLECTION FROM MOTOR VEHICLES. SPAIN, 2010 New Vehicles Sales - VAT - Registration Tax (IEDMT) Fuel Consumption - VAT - Special Tax Circulation Tax (IVTM) Second hand sales - ITP - VAT Registration tax Driving license fees Transfer charge Total
Total (Million €) 2,989.5 2,336.80 652.7 652.7
Porcentaje Out of total Excluding VAT 9.5% 2.6% 2.6%
4.0% 4.0%
18,383.20 5,871.60
12,511.60 12,511.60 2,812.80 2,812.80 226.10 174.90 51.20 89.30 79.70 108.30 24,688.90
23.8%
50.7% 50.7% 11.4% 11.4%
77.0% 77.0% 17.3% 17.3%
0.7% 0.2% 0.4% 0.3% 0.4% 100.0%
Source: ANFAC (11) 7
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THE REGISTRATION TAX IN SPAIN (IEDMT)
European Union: 7 countries do not have any registration tax at all 4 countries: registration tax is not related with CO2 emissions 15 countries: the tax depends on CO2 emissions
The main goal of our work is to (micro) simulate the consequences of different tax schemes. A. B. C.
Construction of data-base (2008 data) Comparison between official figures and our results from data-base Model’s Calibration Simulating different proposals. 8
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A. IEDMT: DATA-BASE CONSTRUCTION PROVISIONAL VEHICLE REGISTRATION DATA: Observations
Ministerial Order: Vehicle price
ITV CODES : Second “perfect” matching
CO2 Emissions
First matching
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DATA BASES PROVISIONAL VEHICLE REGISTRATION DATA Registration date Type of registration Origin Service Type of vehicle Municipality Registration province First registration date Owner (person/company)
ITV CODES First chassis numbers Industrial code Traffic code Weight (Kg) Maximum Mass (Kg) Seats Tax Horsepower CO2 Emissions (gr/kw)
Ministerial Order: 2008 prices Horsepower Price
ITV Codes Car maker Vehicle model Fuel Cubic capacity (cm3) Horsepower (kw) 10
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THE MATCHING PROCESS
First matching: assigning a CO2 level to each ITV code: perfect matching (17,495 errors from 1,818,314 observations) Second matching: assigning a price (Ministerial Order database) to every ITV code (ITV Codes database)
The databases share some variables (Car maker, Vehicle model, Fuel, Cubic capacity, Horsepower) We calculate a price for each “common configuration” and we paired prices to this configuration, using several “waves”: from perfect matching to relaxed requirements (13,994 successes from 16,219 configurations).
Third matching: exporting the price to the registration data 11
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B. WHAT HAPPENED IN 2008? Until 31-12-2007 Tax rates
7%
12%
Petrol
Up to 1,600 cc
More than 1,600 cc.
Diesel
Up to 2,000 cc.
More than 2,000 cc.
FROM 01/01/2008 Emissions: gr. CO2/km.
Less than 120
121-160
161-200
More than 200
Tax rates
exempt
4.75%
9.75%
14.75%
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WHAT HAPPENED IN 2008? (1ST SIMULATION)
Total Less 120 121-160 161-200 More 200
A) TAX AGENCY: TRUE TAX COLLECTION Total Tax Taxable Medium tax per Vehicles (Units) (CO2 g/Km) Income (€) vehicle (€) Due (€) 1,077,554,006 1,073,675 150 16,152 1,004 0 233,652 118 11,968 0 396,697,034 571,390 144 14,815 694 382,581,491 197,744 177 20,206 1,935 298,275,481 70,889 237 29,413 4,208
Source: Tax Agency
Total Less 120 121-160 161-200 More 200
1,038,117 231,815 585,480 174,680 46,142
97% 99% 103% 88% 65%
B) OWN CALCULATIONS 148 98% 18,615 115% 1,110 117 100% 13,664 114% 0 144 100% 17,611 119% 837 177 100% 22,928 113% 2,235 240 101% 39,910 136% 5,887
111% 1,151,880,576 0 121% 489,765,437 116% 390,489,279 140% 271,625,819
107% 124% 102% 91%
Source: own calculations
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WHAT HAPPENED IN 2008? (1ST SIMULATION) A) TAX AGENCY: TRUE TAX COLLECTION Vehicles Medium tax per Total Tax (Units) Taxable Income (€) vehicle (€) Due (€) Total Less 120 121-160 161-200 More 200
1,073,675 233,652 571,390 197,744 70,889
16,152 11,968 14,815 20,206 29,413
1,004 0 694 1,935 4,208
Calibrating coefficient
1,077,554,006 0 396,697,034 382,581,491 298,275,481
0.80997352 0.97974903 1.09811167
103% 1,077,554,027 0 98% 396,697,009 113% 382,581,516 154% 298,275,454
100% 100% 100% 100%
Source: Tax Agency
B) OWN CALCULATIONS Total Less 120 121-160 161-200 More 200
1,038,117 231,815 585,480 174,680 46,142
16,824 13,664 14,264 22,463 43,826
104% 114% 96% 111% 149%
1,038 0 678 2,190 6,464
Source: own calculations 14
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APPLYING THE 2007 TAX REGULATIONS (2ND SIMULATION) A) TAX AGENCY: TRUE TAX COLLECTION
Total Less 120 121-160 161-200 More 200
Vehicles (Units) 1,073,675 233,652 571,390 197,744 70,889
Taxable Income (€) 16,152 11,968 14,815 20,206 29,413
Medium tax per vehicle (€) 1,004 0 694 1,935 4,208
Total Tax Due (€) 1,077,554,006 0 396,697,034 382,581,491 298,275,481
Source: Tax Agency
Total Less 120 121-160 161-200 More 200
B) SIMULATION: APPLYING 2007 TAX REGULATIONS 1,038,117 16,824 1,110 111% 1,437,533,696 231,815 13,664 960 0 585,480 14,264 1,031 149% 489,765,437 174,680 22,463 2,130 110% 390,489,279 46,142 43,826 5,181 123% 271,625,819
133.41%
Source: own calculations 15
C. PROPOSALS: USING VARIABLE TAX RATES (3RD SIMULATION)
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20,00%
Neutral tax rates 2008 tax rates
Tax rates
15,00%
10,00%
5,00%
Tax rate = – 0.188 + Emissions x 0.00156667 0,00% 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 -5,00%
CO2 gr.per kilometre 16
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USING VARIABLE TAX RATES (3RD SIMULATION) Vehicles (Units) Total
Taxable Income (€)
Medium tax per vehicle (€)
Change (%) 104.39%
Change Total Tax Due (€)
(%)
1,038,117
16,836
1,048
1,083,219,584 100.53%
Less 120
231,815
13,664
0
121-160
585,480
14,264
561
80.89%
328,691,048
82.86%
161-200
174,680
22,463
2,058
106.35%
359,474,496
93.96%
More 200
46,142
44,097
8,667
205.96%
399,907,823 134.07%
0
Source: own calculations
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EMISSIONS AS TAX BASE (4TH SIMULATION) Vehicles (Units) Total
Taxable Income (gr. CO2/km.)
Medium tax per vehicle (€)
Change (%)
1,038 103.40%
Change Total Tax Due (€)
(%)
1,038,117
148
Less 120
231,815
117
121-160
585,480
144
1,012 145.84%
592,579,530 149.38%
161-200
174,680
177
1,241
64.15%
216,831,332
56.68%
More 200
46,142
240
1,685
40.04%
77,738,196
26.06%
822
1,077,659,904 100.01% 190,510,876
Source: own calculations
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THE ANNUAL CIRCULATION TAX (IVTM) IN SPAIN
European Union:
Characteristics:
7 countries do not have any circulation tax at all 11 countries: circulation tax is not related with CO2 emissions 9 countries: the tax, direct or indirectly, depends on CO2 emissions. Object: ownership over vehicles (not relate with use) Old design (1988)
We could not expect any important effect derived of the introduction of environmental aspects. 19
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IVTM: TAX DUE Tax Due calculations (art. 95,1 TRLRHL) Tax Due A) Car passengers: Power (tax horsepower)
Euros
Less than 8 THP
12.62
From 8 to 11,99 THP
34.08
From 12 to 5,99 THP
71.94
From 16 to 19,99 THP
89.61
From 20 THP on
PROBLEMS: Discontinuities: sligth increase in THP could double Tax Due THP are not clearly related wiht the ability to pollute
112.00
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IVTM: TAX HORSEPOWER THP = 0,08 (C/N)0,6 N The relationship between cubic capacity (C) and CO2 emissions is not a linear function for modern engines (turbocharger or multi-valve engines are used to increase power with the same engine cubic capacity). Increasing the number of cylinders (N) would raise the tax horsepower in a ratio of more than one unit per cylinder. Adverse effect for diesel against petrol engines.
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IVTM: PROPOSALS FOR CHANGE a) b)
c)
d)
Unnecessary exemptions must disappear (public sector vehicles). The tax due must be calculated depending on the vehicle’s polluting ability (gr. CO2/km.) Discontinuities shuold be avoided. It is not recommended to maintain the coefficients that city councils can apply in a discretionary manner. Under this proposals, city councils tax discounts do not make sense (environmental friendly fuel or engines). 22
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CONCLUSIONS
EU proposals (2005):
From an environmental point of view this policy is not acurate. Automobile taxation are based in three taxes:
Car registration tax abolition Annual circulation tax environmental reinforcement
Registration taxes: influences the acquisition of a car Anual circulation taxes: only indirectly affects the use of car Fuel taxation: directly affects the use of car
We think we need to improve the environmental potencial of all of these taxes.
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