German upper house urges diesel tax break rethink

Germany's upper house of parliament, the Bundesrat, has signalled that it is likely to reject a draft law introducing tax breaks for diesel cars equipped with particle filters. Last week the chamber adopted a non-legislative resolution urging the government to produce an alternative "revenue neutral" version of the law. The Bundesrat represents state governments, which fear the proposal will cause a €1.2bn tax shortfall in their budgets. The government has dismissed this, arguing that recent increases in diesel car sales will offset any shortfall in vehicle tax revenue (EED 02/02/2005). See Bundesrat press release.

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