In this article, Amadeo Fuenmayor, Director of the Regional Taxation Chair, addresses the current situation of the automotive industry and the different public policies related to vehicle taxation.
Firstly, Amadeo discusses the latest developments in the transport sector, such as the increase in fuel prices as a result of the war in Ukraine, as well as the public measures implemented to mitigate this rise, such as the recent fuel subsidy of 20 cents per litre.
In this context, the automotive industry is the most polluting sector in Spain. For this reason, the author argues that car taxation is essential to achieve the goal of climate neutrality set by the European Union for 2050. In Spain, this taxation is based on three taxes: the Special Tax on Hydrocarbons (IEH), the Special Tax on Certain Means of Transport (IEDMT) and the Tax on Motor Vehicles (IVTM).
The collection of these taxes is very uneven. It is worth considering that none of these taxes arose from an environmental perspective. The author explains how these three taxes are currently configured and suggests some reforms that would improve these tax figures. It is also explained that, in addition to taxes, there are other public policies that aim to reduce greenhouse gas emissions, such as aid systems to facilitate energy transition.
In conclusion, the author argues that an urgent rethink of the entire public policy guiding transport is needed, both on the revenue and expenditure side.
