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EU Planning Bigger Taxes For Higher Polluting Cars

Plan would simplify car tax system; cut emissions

STRASBOURG, France (AP) – European Union (EU) lawmakers on Monday, in an effort to overhaul taxes levied on cars in the 25-nation bloc, announced a plan to tax cars on the amount of pollution they emit.

The plan, which would need backing from EU governments, would make tax standards simpler and would require cars that produce more pollution, such as SUVs, to be taxed at a higher rate.

Registration taxes on cars would be phased out and replaced with duties based on the amount of carbon dioxide and other pollutants the cars emit, according to the proposal, drafted by the European Commission last year.

Annual road taxes would be restructured over a period of 5-10 years.

The plan, being debated Monday in the EU Parliament, was expected to pass a vote Tuesday, with most major political parties supporting it.

''This is welcome backing for the use of green taxes in a way that changes our behavior without raising overall taxation,'' British Liberal Democrat Sharon Bowles said before the debate.

The EU plan suggests emissions-based taxes should total enough to replace up 25 percent of revenues from current registration and road taxes by the end of 2008, and half of such revenues by 2010.

Adopting the plan would also make the transfer of cars easier between EU countries, the Commission said.

Currently, each of the bloc's 25 nations has its own automobile taxes, according to its own criteria.

People who move from one EU nation to another can face double taxation on their vehicles, having to reregister in their new country of residence, EU officials said. The tax differences also lead to varying car prices across the EU.