The Latvian Chamber of Commerce and Industry (LCCI), upon reviewing the Draft Law on Vehicle Operating Tax and Company Light Vehicle Tax, suggests necessary corrections that would significantly promote the replacement of personal and company car fleets with new, greener vehicles, by substantially reducing emissions and simultaneously reducing costs to businesses relating to the maintenance of company car fleets.
The purpose of the draft law prepared by the Ministry of Transport is to balance the vehicle operating tax rates of light vehicles and freight vehicles with full mass of up to 3500 kg and the procedure of calculation thereof, as well as to determine the procedure of calculating the operating tax of buses and freight vehicles according to the emissions level. Furthermore, the draft law envisages the introduction of a new light vehicle registration tax with the objective of preventing the registration of old and polluting light vehicles in Latvia.
The LCCI believes that as regards the rates of vehicle operating tax (VOT) proposed in the draft law, the VOT should not be applied to motorbikes with engine displacement of up to 125 cm3. Moreover, the VOT should not be applied to those vehicles that undergo WLTP emissions testing with CO2 emissions of up to 130 g per km, and for vehicles with NEDC emissions testing of CO2 emissions of up to 115 g per km.
In addition, as regards the vehicle registration tax, which will apply upon first registration of light passenger vehicles that are older than five years, the LCCI believes that the registration tax should not be applied to vehicles with the emissions of up to 115 g per km, to promote introduction of greener vehicles.
The LCCI believes that, as regards the company light vehicle tax rate, it must be envisaged that electric vehicles are exempt from the company light vehicle tax or that these vehicles are subject to a symbolic EUR 1.00 rate per month.