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Cars: a suggestion

Rafael Herzberg's picture
Consultant energy affairs, Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

  • Member since 2003
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  • Jan 10, 2023
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Cars: a suggestion

Let's imagine if the regulation established that the taxation (VAT for example)  was inversely proportional to the efficiency of the vehicles.

A very small, light car equipped with an efficient engine would have a much lower VAT tax  than a large, heavy and a low mileage per energy.

If we followed this path, there would be a natural tendency to generate less emissions and probably with the "popularization" of small cars, the same infrastructure, whether in cities or on roads, would have increased capacity to meet the ever increasing demand.

Does it make sense?

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Julian Silk's picture
Julian Silk on Jan 10, 2023

It would depend on how much less the VAT was for the smaller cars vs. how much value you would get for the larger cars.  It's price elasticity as usual.  For construction firms, which need trucks and pickup trucks, the effect would be minimal.  For young singles, who would choose between large sedans and smaller cars that are easier to park, you might get something.

Rafael Herzberg's picture
Thank Rafael for the Post!
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