by Ulrika Lomas, Tax-News.com, Brussels

15 August 2013

Bavaria’s Interior Minister and Christian Social Union (CSU) party member
Joachim Herrmann has advocated that Germany’s motor vehicle tax (Kfz-Steuer)
be abolished and replaced with a general motorway vignette (Pkw-Vignette), to
be purchased by all users of Germany’s motorway network.

In an interview with Nürnberger Zeitung, Herrmann made clear that such
a measure would ensure that foreign motorists also contribute to vital transport
infrastructure costs in Germany without, however, discriminating against foreigners,
in violation of European Union law. Based on the Austrian model, the German
car vignette would be the same cost as the car tax, to ensure that the fiscal
burden on German taxpayers is not increased as a result, Herrmann explained.

Defending his proposal, Herrmann pointed out that from July 1, 2014, responsibility
for the collection of the country’s motor vehicle tax passes from federal
state tax administrations across Germany to the Federal Government. This presents
an ideal opportunity for the car tax to be repealed and for a completely new
system to be introduced, Herrmann emphasized.

Herrmann’s remarks are an attempt to persuade the many opponents of a
car toll (Pkw-Maut) of the merits of such a charge, as well as an attempt to
reassure leading coalition members that the levy would not be seen as discriminatory
by the European Commission.

Bavaria’s Prime Minister and CSU leader Horst Seehofer provoked outrage
recently for his calls for a car toll to be imposed on foreigners using the
country’s motorways. Indeed, Seehofer warned that he would not sign any
future coalition contract after the September elections if this solution to
the country’s transport financing needs is not mentioned in the agreement.

Hot on the heels of this inflammatory ultimatum, the CSU also issued a follow-up
statement, maintaining that 88 percent of Bavarians are in favor of the introduction
of a car toll, according to the results of a recent opinion poll. Insisting
that his plans for a car toll have widespread support among the population,
Seehofer reiterated that the fee for foreigners is simply “a matter of justice.”
Concluding, Seehofer questioned why German citizens are compeled to pay road
charges in Italy and indeed all over Europe when others do not do the same in Germany.
The problem of the future financing of transport infrastructure must urgently
be resolved, the Minister ended.

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