The Motor Vehicle Tax and the Standard Fuel Consumption Tax

Both taxes, on the purchase and owning of motor vehicles, were altered to facilitate tax collection, to create an incentive for the purchase of vehicles "friendly" to the environment, and to make the value-added tax on motor vehicles to conform to EU regulations. The changes were intended to be revenue neutral. In fact, the revenue derived from the motor vehicle tax might be slightly higher, but the revenue from the value-added tax of 20 percent and the standard fuel consumption tax is likely to be somewhat lower than the value-added tax of 32 percent on purchases of motor vehicles and motor cycles. The trend toward motor vehicles with lower fuel consumption has so far not materialised, mainly because of the fall in fuel prices.