PASSENGER CAR RELATED TAXES (11067/05)
Letter from John Healey MP, Financial
Secretary, HM Treasury to the Chairman
You wrote to the Paymaster General on 20 December
2005,[10]
informing her that the above document remains under scrutiny and
asking to be kept informed of any further developments. The Austrian
and Finnish Presidencies chose not to discuss the dossier, but
negotiations have resumed under the German Presidency. I am pleased
to provide you with an update on the progress of these negotiations.
The German Presidency intends to hold an informal
discussion at ECOFIN on 8 May, with the aim of getting a political
steer for future work in this area. To prepare for this discussion,
it held one Working Group meeting.
The proposal has three elements: abolition of
registration taxes, inclusion of a CO2 element in the tax base,
and a scheme to enable tax to be refunded when a resident of one
Member State moves permanently to another. The German Presidency
has gone some way to recognising the subsidiarity concerns of
many Member States by proposing to postpone consideration of the
abolition of registration taxes. Instead, it suggests that work
should focus on the refund scheme and the CO2 element.
The Government's position has not changed since
the Paymaster General's letter to you of 8 November 2005. There
is nothing to prevent Member States from choosing to base their
car taxes on CO2 if they so wish. Therefore the proposal adds
little value. Furthermore, the Stern review highlighted the importance
of maintaining flexibility in the use of policy measures to tackle
climate change, particularly to keep the costs of mitigation manageable.
I will continue to keep you informed of developments
on this dossier.
30 April 2007
10 Correspondence with Ministers, 45th Report of Session
2005-06, HL Paper 243. Back
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