The EU made £370 billion last year from vehicle tax

EU tax earnings

New data from the European Automobile Manufacturers’ Association (ACEA) reveals the 15 major EU countries earned £370 billion from vehicle taxes last year.

For context, that’s a 3.5 percent increase compared with the previous year. The figure also represents more than 2.6 times the total EU budget, which was £142 billion for 2019.

Different EU regions tax their car-owning residents in different ways. Common practice is to base taxation on CO2 levels, but some member states remain faithful to engine power, cylinder capacity or a combination of these and other factors.

EU tax earnings

While the uptake of electric and ultra-low emissions vehicles has been incentivised in some way or another across 24 of the 28 European member states, it’s questionable how much these offers benefit drivers. The increase in revenue suggests they aren’t taking the tax-break bait.

“Tax measures are a crucial tool in shaping consumer demand for zero- and low-emission vehicles,” said ACEA Secretary General, Erik Jonnaert.

“Given that the affordability of electric cars is still a major barrier to their wider market uptake, Europe’s auto manufacturers strongly encourage the 28 national governments to put in place meaningful incentive schemes.”