In an official press release, theDanish political party Radikale Venstre (B) is pushing for a restructuring of the country’s vehicle tax system to accelerate the adoption of electric vehicles and support the green transition.
Their proposal includes maintaining low taxes on EVs, removing incentives for plug-in hybrids, and introducing new tax mechanisms aimed at reducing congestion and pollution.
The key proposals of Radikale Venstre
Radikale Venstre argues that the shift towards a more sustainable vehicle fleet must happen as quickly as possible. They believe that the current tax structure should be redesigned to prioritize fully electric vehicles while discouraging the use of traditional fossil-fuel cars and plug-in hybrids (Germans could not agree), which have uncertain climate benefits.
1. Abolishing tax benefits for plug-in hybrid vehicles
The party proposes eliminating tax reductions for plug-in hybrid vehicles by 2026. The increasing sales of fully electric vehicles demonstrate that they are a viable alternative to conventional cars. As a result, Radikale Venstre plans to phase out the current tax discount for plug-in hybrids, ensuring they are taxed at the same rate as combustion engine vehicles. This change aims to push consumers towards fully electric alternatives when replacing their petrol or diesel cars.
2. Eliminating registration tax for electric vehicles
To prevent EVs from becoming more expensive and to maintain the current momentum in sales, Radikale Venstre suggests phasing out the registration tax for fully electric cars, including commercial EVs. Meanwhile, registration taxes on fossil-fuel vehicles and plug-in hybrids would remain in place to send a clear signal to consumers that the most affordable choice should also be the most environmentally friendly.
3. Implementing higher and differentiated annual ownership taxes
The party proposes increasing the annual vehicle ownership tax, which would be differentiated based on a car’s weight and fuel type. This measure aims to offset the loss of revenue from the removal of registration taxes while encouraging the use of more energy-efficient vehicles. Until a road usage tax is introduced, the increased ownership tax would serve as the primary fiscal tool for regulating car usage.
4. Introducing a kilometer-based road tax
Radikale Venstre envisions a future taxation system that includes a national, kilometer-based road tax by 2030.
This would apply to all vehicles, including private cars, to create a more balanced approach between private and public transportation. The tax is designed to reduce traffic congestion, improve air quality in cities, and lower transport-related emissions.
5. Raising the diesel tax
Denmark currently has lower diesel taxes than its neighboring countries, which has led to cross-border fuel trade and reduced the impact of higher environmental taxes elsewhere.
To address this, Radikale Venstre proposes increasing the diesel tax by an additional 0.5 DKK per liter.
Does it worth?
Radikale Venstre acknowledges the financial impact of reducing traditional vehicle taxes and aims to ensure that lost revenue does not create a budget deficit – since the government already wants to save money through very controversial measures..
Their strategy emphasizes shifting taxation from the value of vehicles to their ownership and use, ensuring that the system supports sustainability without destabilizing public finances.
