Tax bands under scrutiny as WLTP approaches

04 May 2017

Tax bands under scrutiny as WLTP approaches

4 May 2017

With the new Worldwide Harmonised Light Vehicle Test Procedure (WLTP) emissions test set to debut in the second half of 2017, there are concerns that the different CO2 figures produced could cause an increase in the tax paid by drivers to keep their cars on the road.

The system will replace NEDC on new models introduced to the market from September 2017, with every vehicle model subject to the real-world driving test one year later. It is expected that this will see an increase in the registered CO2 levels that vehicles emit as they will be pushed harder than under standard laboratory conditions.

Vehicle manufacturers are concerned that the higher CO2 levels registered through WLTP will cause irregularities in the levels of tax that need to be paid. Currently, some countries calculate the amount based on the emission figures supplied through NEDC testing. Manufacturers are now warning EU governments that while vehicles are likely to produce higher CO2 levels in WLTP, no more emissions than normal will actually be released and therefore tax bands should be amended to reflect the higher numbers.

A report from Ireland highlights the potential issue together with the confusion it may cause. It states that one car might register 100g/km emissions under the outgoing NEDC test. That would mean 15% Vehicle Registration Tax (VRT) in the purchase price and €180 road tax. But the same model could be 120g/km (17% VRT, €200 tax) at another dealership under the WLTP test.

However, in a press conference in April 2017, Erik Jonnaert, Secretary General of ACEA, made it clear that consumers may come across two different values for emissions figures as manufacturers switch from NEDC to WLTP after September 2017. In order to maintain transparency, especially concerning the issue of how WLTP will be integrated in car labelling, Jonnaert suggested that EU member states go for a ‘one shot’ introduction from January 2019.

Jonnaert also stated that governments ought to make sure that the switch will not lead to increased taxation of the same vehicles, especially as tests will not impede performance.