Consequences of a New Taxation System for Ownership and use of Diesel-Fuelled cars

On 1 October 1993 a new taxation system was introduced in Norway for diesel-fuelled vehicles, under which the fixed tax on each kilometre driven was replaced by a direct tax on the sale of diesel, combined with an annual tax on vehicles and trailers above certain weight limits. The change is part of the general harmonisation of Norwegian transport taxes with those of other countries. For some categories of vehicles the change has led to an increase of tax burden, for others a reduction. In general it has become more economical to run cars with a low fuel consumption. The report deals with the changes in the tax burden for diesel-fuelled cars and on the consequences of the new taxation system for car sales and car use.