The concept for introducing an infrastructure levy on private cars in Germany has been finalised. Federal Transport Minister Alexander Dobrindt has presented the salient points of his plan in Berlin. The infrastructure levy will be charged for the use of federal highways (Bundesstrassen), state roads (Landesstrassen) and municipal roads (Kommunalstrassen). Owners of vehicles that already pay motor vehicle tax in Germany will see their motor vehicle tax reduced to offset the cost of the new levy.

No additional financial burden for German drivers

A vignette system will be introduced. For vehicles registered outside Germany these will be available as ten-day, two-month or one-year vignettes. They can be ordered online or purchased at filling stations. German car owners will be given notice along with the notification of the reduction in the motor vehicle tax they are required to pay.

Motor vehicle tax for German-registered vehicles will be reduced, with exemption limits set for each vehicle type. Above the exemption limit, tax will be payable. This is intended to ensure that owners of German-registered vehicles do not suffer any additional financial burden – as laid out in the Coalition Agreement.

The Federal Transport Minister justified the introduction of the levy with the need to raise more cash to repair and maintain the country’s transport infrastructure. Every year some 170 million trips are undertaken on German roads by foreign-registered vehicles. It is imperative that they pay a share of the costs of the infrastructure. It is merely a case of changing an unfair system, he said.

Levy compatible with European law

"The infrastructure levy is fully compatible with European law," declared Alexander Dobrindt with conviction. The levy will be imposed on all vehicles, German and non-German alike, in line with the principle of equal treatment. Since there is no system of harmonised vehicle tax inside Europe, Germany is free to modify its tax as it sees fit. He pointed to similar procedures in the United Kingdom.

The minister reported on talks with the European Commissioner for Transport Siim Kallas. It has been agreed with him, that a working group of the German Federal Transport Ministry and the European Commission will provide back-up support for the bill. The European Commission also welcomed the fact that users will be called on to finance a greater share of the infrastructure, he said.

Revenue of some 2.5 billion euros over four years

The Federal Transport Minister expects the new system to generate revenues of some 2.5 billion euros within one four-year legislative period. The costs of collecting the levy are put at eight per cent. Inter-ministerial consultation, particularly with the Federal Finance Ministry, will be needed, since a reform of the motor vehicle tax system will be involved. This has already been discussed with the Federal Finance Ministry.

With respect to criticism of the infrastructure levy already voiced in the Netherlands and Austria, Alexander Dobrindt said he would be holding further talks with his counterparts.