The Parliament of Catalonia approves the CO ₂ tax on cars with a very large majority

The Parliament of Catalonia has approved, with the votes of Junts per Catalunya, Esquerra Republicana, PSC and the Comuns, the modification of the Catalan Law on Climate Change, approved in 2017. Once the obstacles that hindered the implementation of the new CO2 tax on vehicles have been overcome, it will finally begin to be charged next year although with a date of the year 2019.

In total, 3.6 million vehicles will have to pay the tax, which will leave the coffers of the Generalitat 40 million euros first year (corresponding to 2019), although this figure could be multiplied by more than twice in 2020. They have opposed this pact PP and Citizens, while the CUP abstained. Result of the Parliament: 77 votes in favour, 30 against, and 4 abstentions.

The tax will tax vehicles based on their emissions, so that it penalizes more those that emit more CO2 and, therefore, contribute more to the warming of the atmosphere. In total it will have six progressive sections, so that more is paid in each emission section, something similar to what happens with the water channel.

In new tax it will have a specific character, that is, it will come home as a separate tax from the others; it will be, so to speak, like the road tax that is paid once a year.

Vehicles that throw less than 120 grams of CO2 per kilometer will be exempt from this payment in 2019, and from 2020 they will pay the tax by exceeding the bar of 95 g / CO2 / km. The ultimate sense is to promote a cleaner fleet by giving ecological signals to the market.

Cars and vans will be taxed in 2019 (although the receipt will be collected in 2020) while motorcycles will be incorporated in 2020 and will pay it in 2021.

It will be a progressive tax: according to the emissions of the vehicles

It will be a finalist tax -as the law had already established-, so that the resources obtained will be destined (about 40 million euros next year) to nourish a fund to finance actions in the field of climate change mitigation (still to be defined) and other natural heritage funds, for conservation policies of natural spaces.

Achieving a more precise and legally more robust modification of the CO2 tax has been the most substantial element of the modification of the Catalan law of Canvi Climàtic. Older cars lack information on their CO2 emissions.

Therefore, it was necessary to stipulate by law a method of calculation estimated as accurate as possible of this tax to give legal certainty.

At the time of establishing this tax in 2017, the Generalitat found -among other problems- that it could not apply it to the oldest (because in its technical sheet it does not give the detail of the emissions).

It has been possible to set an estimate of emissions of older vehicles

He had to obtain the census of vehicles registered in Catalonia (delivered by the General Directorate of Traffic), and, finally, he has been able to make a calculation to determine the emissions of those vehicles. For them it has had the help of the Barcelona Supercomputing Center, which has established a formula to establish the taxable base of the tax, which has taken into account different parameters (fuel, power, displacement, mass or, age of the vehicle.

The estimated reading of emissions affects between 40% and 50% of total vehicles while the rest have assigned those emissions in their technical sheet, and, therefore, it is not a problem for the Administration to establish the amount that has to be paid.

The initial intention of the Government was to apply the tax in 2018, but successive delays have meant that in practice it has to be formally delayed until 2019.

It will be the most important own tax of the Generalitat according to the number of taxpayers.

Annual periodicity

The new tax will have an annual periodicity and will have as its first date of application the year 2019 (the receipt will be dated December 31 of each year). “This will be the most important own tax of the Generalitat according to the number of taxpayers; in total, almost three million,” said last October the secretary of the Government, Marta Espasa. It will be a tax very similar to that of other local or state taxes (IBI, or circulation tax …).

The Tax Agency already has the data of all the vehicles, which have been transferred to it by the General Directorate of Traffic.

The Agència Tributària will turn the settlements by sending them directly to the taxpayer, without the latter having to make a self-assessment. “We will set the fee and tell the citizen what he must pay, as if it were another tax, such as the circulation tax or the IBI,” adds Marta Espasa.

The Agència Tributària will elaborate, in this first year of application, a provisional census, as a proposal for liquidation, which will be exposed to the public between May 1 and 15 and which will be published in an edict in the DOG.

Then, after a period of 15 days of exposure to present allegations by interested persons, a definitive register will be available the first half of September.

Given that a prior notification will be made in May – against which citizen allegations would fit – and that the final register will be in September, it is estimated that the tax will begin to be paid at the end of the year, although a good part of the receipts would be delayed until 2021.

The tax will be more expensive next year

The tax has a progressive environmental taxation structure in five tranches, so that the highest emission segments are especially penalized. In 2020, this requirement will be higher; that is, the tax is will be more expensive.

Thus, in 2019, vehicles would be exempt from paying in the strip up to 120 grams per kilometer traveled – they will be taxed from that amount – while in 2020, they would begin to pay when they exceed the barrier of 95 g / km.

A vehicle with emissions of 150 g/CO2/km, for example, would pay 17.5 euros in 2019 and 44.5 euros in 2020.

On the contrary, a 4×4 with an emission volume of 218 g/CO2/km would be punished with 76.6 euros in 2019 and 128.77 euros in 2020.

The legal amendment also clarifies better that companies (car rental and others) are subject to the tax when they have a branch or an office in Catalonia.

In this sense, it is pointed out that both natural and legal persons who, without having a tax domicile in Catalonia, have “an establishment, a branch or an office for vehicles” are subject to tax liabilities.

In the first year, the Generalitat expects to raise about 40 million euros, half destined to policies to face the climate emergency

The introduction of this tax has undergone a long process, blocked especially in the phase of application of article 155 (in which Catalonia lost its self-government) and with an appeal of unconstitutionality (presented by the PP), and finally won at this point by the Generalitat last June, because the judges interpreted that there was no double taxation, but it was a tax of the Generalitat.

The Climate Change Law created two funds with the resources raised: a Climate Fund to support the energy transition (aid to clean sectors) and a Fund for Natural Heritage, intended to finance actions in the natural environment, now underfunded.

The estimated final income has been estimated at about 80 euros per year, but Hisenda prefers not to venture into these calculations, although other sources estimate that they could be even higher in the future.

They will nourish two funds of the Generatitat with environmental purpose

A relevant element of the new tax is its 100% environmental purpose. All that is collected will go to actions to protect the environment, as explained at the time Marta Subirà, secretary of Medi Ambient of the Department of Territori and Sustainability.

“50% of the proceeds go to the Climate Change Fund, which will promote mitigation policies, such as the improvement of public transport and aid for the renewal of fleets of old and more polluting vehicles as well as policies to adapt to climate change,” he said.

“We need more and better instruments to deal with the climate emergency,” he stresses. “The other 50% will go to the Natural Heritage Fund,” Said Subirà a few weeks ago, recalling the importance of the United Nations IPBES report by warning of the need for more active policies to manage biodiversity and natural spaces.

“We must better manage and protect nature, an area that has always been underfunded, and for this we need more human and economic resources. The tax will mean a leap forward in the management of the natural heritage in Catalonia by all the actors involved in the territory,” he concludes.

The main keys to the tax are these:

1 WHEN IS IT PAID? The new tax will have an annual periodicity and will have as its first date of application the year 2019 (the receipt will be dated December 31 of each year). The payment period is set between November 1 and 20 of the following year, that is, the first invoice must be paid in 2020.

2 WHO SHOULD DO IT? All passenger cars with a maximum of eight seats, vans for the transport of goods with a maximum mass not exceeding 3.5 tons and motorcycles (although in the latter case, their application is delayed until 2020) will be subject to the tax. Electric vehicles or fleets of police services are exempt, but not other vehicles of the administrations. Trucks also don’t pay, which prompts some of the allegations.

3 TO WHOM? The Agència Tributària will turn the settlements by sending them directly to the taxpayer. Previously, the Secretaria d’Hisenda will make a procedure to notify the self-assessments individually, so that the citizen can present allegations if he does not agree with the emissions that have been assigned. The final list will be presented between September 1 and 15, and against it there will still be an appeal or claim. Through the budget law of the Generalitat, the elements to quantify the tax may be modified.

4 CAN I APPEAL? A first register will be presented between May 1 and 15. The citizen may lodge an appeal. The Administration will be obliged to respond to the allegations, and when the register is already final -September- the fee to be paid finally -established- will be notified personally.

4 WHAT IF I SELL THE CAR, WHO PAYS? Logically, the tax will be paid by whoever at that time is the owner of the vehicle according to the registration in the general direction of ¬Traffic.

The parliamentary debate: lively and interesting

The parliamentary debate has been lively and interesting. In his appearance in the parliamentary debate, the deputy of Citizens, Antonio Espinosa, denied that there can be talk of a progressive tax. “The tax will be paid for having a car; it does not comply with the principles of progressivity and equity,” he said.

His argument, in addition, is that since older cars are penalized more and these correspond to people with less purchasing power, “those who will pay more will be people with lower incomes.”

He said it is not imposed on CO2, but on cars; and referred to the apparent contradiction that supposes that a car that does 500 kilometers a year pays the same as another that travels 30,000 kilometers.

He also complained that the parliamentary process has been very fast and that he did not listen to his proposal so that most of the money raised (60%) was destined to the climate fund, and the corresponding actions, with higher priority than the items reserved for the conservation of the natural heritage. “With the excuse of the false CO2 tax they want to increase the tax burden. Stop putting your hand in the pockets of the Catalans,” he concluded.

The PP and the “collection eagerness”

Santi Rodríguez (PP) used similar arguments. “It has been the fastest project in history,” he lamented. “You guys are bothered by the debate,” he blurted out. He also argued that the tax can have an impact on the car industry, which accounts for 10% of GDP and employs 15,000 workers.

“And it does not pay more who pollutes the most, but who has a vehicle domiciled outside Catalonia,” he said, because it may be the case of a car that is registered outside Catalonia and moves in this community, which would avoid paying the tax, “he said. He also insisted that “those who do 500 kilometers a year pay the same as those who do 30,000.”

The deputy repeatedly spoke of pollution, when the tax refers to CO2, a gas that does not pollute, but heats the atmosphere.

He said that the tax forgot about less populated Catalonia (by not incorporating bonuses or exemptions for these areas), “in which there is no alternative of public transport”.

He added that “a tax on hydrocarbons would be fairer”, although here the Generalitat would not have the same margin to act; and unsuccessfully asked for an exemption for new cars. He concluded by saying that the real purpose of the Generalitar was “collection”.

Jordi Terrades (PSC): “we must move from discourse to take action”

The PSC, through its deputy Jordi Terrades, supported the modification of the law with the argument that “we must move from the discourse of climate change to take some kind of measures.”

He added that “it cannot be said that this tax calls into question the car industry,” referring to the example of Germany, where there is a powerful manufacturing industry and “has the highest taxation for vehicles,” he said, without these accusations being launched.

He also criticized the procedure and the urgency of the majority that supports the government. The PSC asked (and was accepted) to withdraw the exemption from the tax that was provided for the vehicles of the administrations, a privilege that it considered unjustifiable, “because the administrations are the first to set an example” giving signs that emissions must be reduced.

He complained that the items to combat climate change are only 1.6% of the budgets, and “would remain at 0.5% if those destined for public transport were discounted.”

David Cid (Catalunya en Comú Podem), to PP and C’s: “you are not bothered by the tax, but that we talk about climate change!”

David Cid (spokesman for Catalunya en Comú Podem) elaborated on the scientific arguments that justify the need to act. He referred to the increases in temperatures in Catalonia (+1.6ºC since 1950), to future projections and the need to reduce emissions by 8% each year to alleviate warming and follow the path of mitigation.

He also recalled that polluting gases (associated with car emissions) prematurely kill about 400 people a year in the Barcelona area. Addressing the right-wing opposition parties, he told them: “You are not bothered by the tax, but by talking about climate change!”

Regarding whether it is a progressive tax, he said that, as a preliminary matter, we must consider that “50% of Catalans either do not have a car or do not have a driver’s license.”

“In Catalonia, we have lost 10 years in the fight against climate change. We have to move from rhetoric to facts,” he said.

Natàlia Sánchez (CUP): “It is not a progressive tax”

Natàlia Sánchez Dipp (spokesperson for the CUP) expressed reservations about the suitability of the tax. “It’s not the tax we wanted. It is not a priority to combat the climate emergency,” he said after criticizing the government’s inaction in the deployment of the climate change law (since it is necessary to set taxes for NO2 emissions to large ships that dock in ports).

“It’s not a progressive tax. It does not penalize more those who pollute the most. It’s a car tax,” he reiterated.

Teresa Pallarés (JxC): “We have taken a step to combat climate change”

Teresa Pallarés (JxC) stressed that the processing of the modification has tried to simultaneous urgency and consensus.

He added that the initiative is in line with European policies. He highlighted the technical work developed to find a formula that allows estimating emissions, and said that the modification of the law is “a step” to continue advancing in the fight against climate change.

He stressed that scientific reports on temperature increases cannot leave anyone indifferent.

“We have been told very clearly by the WMO” (World Meteorological Organization)

Lluís Salvadó (ERC): “No European city tax is established according to mileage. What you propose to apply is impossible.”

Lluís Salvadó (ERC) replied that throughout Europe there are about 20 municipal car circulation taxes that carry criteria for penalizing CO2 emissions, and that the proposals of PP and C’s were unfeasible.

“None of these taxes are set based on mileage. What you propose to apply is impossible,” he said.

Salvador had affectionate words of gratitude to Josep Rull (now in prison), who was the promoter of this law, and insisted that his task should also be recognized in these moments of political upheaval.

Source: The Vanguard