German government criticised over car tax U-turn

Environment agency chief pans decision to give registration tax holiday to all new vehicles

The head of Germany's environment agency (UBA) has criticised a government decision last month to exempt all new cars from vehicle registration tax until mid-2009, and to exempt cleaner Euro 5 and 6 class cars until mid-2010.

The policy modifies the government’s earlier plan to base the level of vehicle tax solely on emissions, rather than engine capacity.  UBA president Andreas Troge told the Handelsblatt newspaper that the new policy was a "backward step in environmental policy".  Ending the tax-free status of company cars would help the environment more, he said.

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