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Portuguese budget links car taxes to CO2

The Portuguese government has approved linking vehicle taxes to carbon dioxide emissions as part of the 2006 budget. In a statement, it said the initiative, which enters force next July, "marks the beginning of a progressive reform to make vehicle taxation work to combat pollution". Definitive figures have not yet been released but the finance ministry said there would probably be a 10% reduction for cleaner vehicles. In July the European Commission proposed that all EU states should increasingly base car taxes on CO2 emissions (EED 06/07/05). See Portuguese government and resolution.

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