Greek Road Tax 2016 – Government Gets Less Money by Charging More

I did some back of the napkin calculations to see if the government actually gets less money if it charges the owners of large engined cars more and surprise surprise, they do get less.

Comparing a Nissan 350Z and a Golf 1.6 diesel, the government gets 197 Euro less a year in tax, assuming the 350Z owner takes his/her car off the road and gets a Golf diesel instead. Or worse still, sells the 350Z and a heavily discounted price.

Which makes you wonder why the government does it.

Everybody loses. The government loses and the owner of big engined cars lose.

Here are the rough calculations

Nissan 2007 350Z and a 2012 Golf 1.6 Diesel

Tax on the 350Z is 1150 Euro a year.
Tax on the Golf is 280 Euro a year.

Googling "350Z MPG" gives us an average figure of 21mpg

Googling Golf MK6 1.6 MPG gives us a figure of 45mpg

Assuming 12,0000 miles a year

Fuel cost for 350Z = 12,000/21 = 571 Gallons
@ 5 Euro per gallon that gives us a total cost of 2855 Euros

Fuel cost for Golf = 12,000/45 = 266 Gallons
@ 5 Euro per gallon that gives us a total cost of 1330 Euro

Assuming 70% of fuel is taxes

The difference in government revenue is – 1067 Euro  (2855*0.7)-(1330*0.7)

Difference in road tax is 870 Euro. (1150 minus 280)

So by charging super extra road tax for the 350Z the government is 197 Euro worse off. (1067 Euro minus 870 Euro)

And this is ignoring the money the 350Z driver loses in depreciation due to the tax being so high.

And the driver is also worse off by having to drive a 1.6 diesel Golf instead of a 350Z.

The government loses financially, the driver loses financially,

So why does the government do it?




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