Minister denies rumours of new car tax changes in May

THE Finance Minister yesterday denied rumours claiming there would be a change in the car taxing system after May 1, 2004, when the island officially joins the European Union.
Speaking before the House Commerce and industry Committee, Marcos Kyprianou stressed that the first phase of car tax reform would last for at least two years before the state studied the matter anew.

Last month, the government overhauled the car taxation system, taxing cars according to their engine capacity and not their value.

The move brought substantial price cuts on cars of up to 2000cc.

Yesterday, Kyprianou said EU accession would not affect the car taxation system as this was not based on customs duties, which will be scrapped, but consumer taxes and VAT which the state will continue to impose.

He said there was no acquis regarding cars and every member state could impose consumer taxes according to its own system.

Concerning the import of new vehicles from abroad, Kyprianou said excise and VAT would be levied, while importers of used cars previously registered in the EU would still have to pay consumer, tax irrespective of whether it had already been paid in the EU.
He added that with accession and the abolition of exclusive dealerships, the market would be liberalised to the benefit of consumers.

Replying to a comment by Green deputy George Perdikis, the minister said the state would have made £1 million in fines if it had enforced a directive issued in June for car advertisements to include fuel consumption and carbon dioxide emissions.

Deputies stressed that consumers should be informed about the exact amount they were paying on tax when they were buying a car.

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