Transport

Tax reductions on electric (fully or plug-in hybrid) vehicles aiming at increasing the number of low emission and energy efficient vehicles on the roads [Hungary]

This 2016 policy is a market-oriented measure: using tax reform to support cleaner transport. However, there have been some perverse incentives, with companies buying cars for personal use of their staff as the company car tax has been abolished. This is also a regressive measure, benefiting higher income households over lower income households through its focus on private transportation. 

Recommendations

  • Reverse the abolishment of the company car tax, or make the tax dependent on mileage as energy efficiency and fuel savings are equally important.
  • Do not exempt electric vehicles from the company car tax as abuses of the system lead to benefits for wealthy over lower-income families.
  • Make the external cost charge for lorries, which is now zero,  dependent on the truck's direct carbon dioxide emissions.
  • Include an assessment of the greenhouse gas emission reductions of this measure.

Related best practices

Building, Transport

Hungary Case Study – 100% renewables for buildings and transport in Kaposvár [Sep. 2019]

Transport

HU-GO Electronic Toll System [Sep. 2019]

Transport

GLS Small Parcel delivery with bicycles Hajtás Pajtás [Sep. 2019]

Related questions

View more
EN

Clean air is a human right! What can your (local) government do to uphold it?

Join the conversation

Subscribe to our newsletter

Fill in your email address here and stay connected.

Follow us on social media