The government wants changes to the excise tax

Poland’s government is not afraid to take bold steps when it comes to the taxation system. Earlier this year, the ruling party made some changes to the CIT tax. A reform programme aiming at increasing the VAT revenues is under way, and work on a single tax in the place of several mandatory employee contributions has been officially launched.

Taking all that into consideration, it is not a surprise the Ministry of Finance has come up with some plans with regard to the construction of the excise duty paid on newly-registered cars. The tax will affect all those buying new cars as well as second-hand vehicles imported from western Europe.

Polish people are keen on importing cheap cars from abroad (particularly from Germany) and selling them off at a higher price. Buying a second-hand vehicle for many seems like a reasonable option, taking into consideration the fact that a new car loses its value very fast.

The popularity of used cars in Poland means the domestic roads are full of vehicles that are several years old. A lot of them vehicles do not meet the current EU emissions standards. Air pollution and road safety are probable motivations behind the planned changes in taxation.

Currently, the duty on the newly registered cars is based on vehicle value and engine size. This is soon to change. Engine size will still be taken into consideration, but the determining factor is to be the age of a motor vehicle.

To put it simply, the older (and thus, the less environmentally-friendly) the car, the more excise the owner can expect to be charged. New vehicles, which meet the EU clear air policy, will be subject to lower excise duty than today. On the other hand, importing cars made before 2004 may in some cases become economically unreasonable due to high taxation.

Another planned change will concern the taxpayers. Today, excise duty on motor vehicles is charged only on passenger cars. The government wants to change that. The obligation to pay excise will arise in the case of all vehicles weighing up to 3.5 ton, including company cars.

Exact new tax rates are not yet known. Electric cars are to be exempt from the excise duty. The Ministry of Finance expects the tax will to bring around 2.4 billion PLN of revenue. In the long term, Poles will breathe cleaner air.