Denmark slashes car tax

Having previously reduced the registration tax for internal combustion engine (ICE) cars from 180% to 150%, Denmark has now announced that it will further reduce this tax to no more than 100%. 

The measure is part of the centre-right Danish government's €3.1 billion package of tax cuts  by 2025, aimed at stimulating the economy of what the OECD estimates is the most heavily taxed country in the world, reports Autovista.  

The announcement of the reduction in vehicle registration tax is likely to result in a massive fall of new-car sales in the short run, but would be beneficial to automotive sales once the measure comes into effect. The government has promised to do so as quickly as possible, to minimise disruption. 

The overall tax cuts, and the expected fall in revenue, are said to be a motivation behind the removal of tax breaks for buying electric vehicles (EVs), which led to a collapse in EV sales in Denmark by more than 60% in the first quarter of 2017.

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