6. The ecological component of transport vehicle tax – a step to the green reform in the Republic of Bulgaria

The latest amendments of the Local Taxes and Fees Act (LTFA) in force since the beginning of 2019 have been voted difficultly because of the public dissatisfaction with the change in the transport vehicle tax. For the first time, the conceptual basis of the tax has been added with an environmental component. It takes into an account of the compliance of the cars with Euro standards for exhaust gases. These amendments reduce the tax burden for the owners of new vehicles that meet current requirements and increase it for those who do not have the relevant environmental category.

Keywords: transport vehicle tax, ecological component, green reform

The current research proves that most European countries apply different taxes based on CO2 emissions. Bulgaria is among the few countries that, prior to the change, did not use similar financial instruments in order to achieve not only fiscal but also other aims in the environmental policy. A number of EU directives regulate exhaust gases standards and these requirements are increasingly tightening. Bulgaria is a part of the EU and it implies harmonization of our tax legislation including the part of the vehicle tax.