Car Leasing News

The French government’s enthusiasm for using taxes as weapon to bring in green revolution is making its officials worried over the popularity of the “bonus-malus” system for cars and consumer products. Government, through its tax regime, proposes to reward those who contribute to the green revolution and punish those who negate its efforts. People who buy low CO2 emission cars will be entitled for a handsome bonus. Those buying high CO2 emission cars like a petrol-guzzling sports car will have to pay substantial amount of initial “malus” and as per the government plan, an additional tax of 10 per cent of original charge, every year.

The scheme has had mixed impact on the sales of new cars. Sales of small cars in the first half of the year in France shot up by 50 per cent while those of highly polluting vehicles fell by 40 per cent. The “bonus-malus” tax regime has been widely appreciated, but some of the impacted quarters did not spare it of criticism. Environmentalists consider it less adequate to tackle the grave problem of environment pollution. The car associations feel that new tax rules are penalising buyers of second-hand cars unfairly.

It is more surprising to know that government officials are getting excessively worried over the popularity of “bonus-malus” as they fear the tax regime which was expected to revenue neutral is likely to eat away big chunk of their tax collections and cost money to the government. Car manufacturers are not sure about the effects of new taxes as their share prices tumbled initially. Renault and Peugeot are confident of reaping benefits from new rules since they are already producing a big range of low-emission cars.

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