17th October 2023, Skopje – At its session held on Tuesday, Government of the Republic of North Macedonia adopted amendments to the Decree on the Manner of Assessing Motor Vehicles Tax and the Amounts Necessary for Assessment of Motor Vehicle Tax deriving from the need to apply new methodology for assessment of the emission of exhaust gases by motor vehicle, for the purpose of environment protection, fulfillment of the commitments under the signed Paris Agreement for reduction of net greenhouse gas emissions, as well as harmonization with the latest EU standards.
The new method, based on measuring the CO2 emission in real traffic conditions, is a globally harmonized test procedure for the level of CO2 emission by motor vehicles, which is binding in the EU for all new-manufactured vehicles starting 2022, and it provides directly linking up the motor vehicle tax and the negative externalities caused by vehicles’ CO2 emission.
Stipulating this method in the Republic of North Macedonia allows for new passenger vehicles to be adequately taxed, according to their average CO2 emission values indicated in the Certificate of Conformity using the WLTP method.
Applying the prescribed coefficients for calculating the specific CO2 component provides for strengthening the taxation of motor vehicles which are the largest polluters, falling in the category of luxury vehicles or very old vehicles which are least environmentally friendly. The objective is to encourage the citizens and the companies to invest in purchase of vehicle that meets higher environmental standards, regardless of whether it is a new or used vehicle, thus contributing to decarbonization of the transport in the country and reduction of air pollution.
According to the Customs Administration data on import of passenger vehicles in the country, the new Decree will have no negative financial effect on the buyers of new vehicles, except for those vehicles falling in the category of luxury vehicles, i.e. premium vehicles. On the contrary, the new Decree is expected to put downward pressure on sales prices of new low- or middle-class vehicles.
As regards used passenger motor vehicles, negative financial impact can be only noted for more luxurious vehicles and very old vehicles. In both cases – when purchasing new or used vehicles, the effect of the Decree will be reflected in the amount of the motor vehicle tax on vehicles falling in the group of the largest CO2 polluters, which are imported in the country in small number.
The process of preparation of modifications and amendments to the Decree was conducted in a transparent and inclusive manner by holding consultations with representatives from the Chambers of Commerce in the country, which voiced support for the adoption of the new Decree.