Volkswagen scandal may lead to rethink of Norway's new car tax

by Reuters
Tuesday, 29 September 2015 12:47 GMT

* Norway was due to present new car tax based on emissions

* Volkswagen scandal may delay this - government ally

By Henrik Stolen

OSLO, Sept 29 (Reuters) - The scandal over Volkswagen's cheating of vehicle emissions tests may lead to a rethink of a new Norwegian tax proposal rewarding low emission cars, a key government ally told Reuters on Tuesday.

The German carmaker is struggling to tackle the biggest business-related crisis in its 78-year history after it admitted to cheating U.S. diesel emissions tests.

In May, Norway's government agreed to introduce a new system of car taxes rewarding low pollution vehicles such as electric cars and hybrids by basing taxes more on emission levels as opposed to horsepower.

The finance spokesman for a small centrist party that supports the minority rightwing government said the Volkswagen scandal may delay the introduction of the tax.

"We have a car tax system leaning on accuracy between type approval and the actual emissions. The Volkswagen scandal ... has really shown that it is possible to manipulate this type of approval," Terje Breivik of the Liberals said in an interview.

The government parties, the centre-right Conservatives and the populist Progress Party are currently preparing the 2016 budget, which will be presented on Oct. 7. They will need the support of the Liberals to pass it in parliament.

The new tax system was supposed to be implemented at the beginning of 2016, but with the revelations in the car industry over the past week, this might change, said Breivik.

"It might be delayed. We have based tax relief worth billions of Norwegian crowns by rewarding low emissions, but then we must know for sure that the numbers are real."

The finance ministry was not immediately available for comments. (Editing by Mark Potter)

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