The popularity of electric vehicles is increasing as worries about climate change increase. But as more and more people choose electric cars, governments are finding it difficult to determine how much IS to tax them.
Electric vehicles are subject to a variety of taxes. Charging a single price for all-electric cars is one way to go. Although this method would be straightforward and simple to use, it wouldn’t account for the many kinds of electric cars that are already available in the market. For instance, compared to a huge electric SUV, a little electric car would probably cause less wear and tear on the roads, thus saving the road too.
Taxing electric automobiles according to their size or weight is an additional choice. Since it would guarantee that larger vehicles pay higher taxes, this would be more. It would need the government to weigh and measure every electric car, which would make administration more difficult.
Taxing electric vehicles according to their energy usage is a third choice. Since it would guarantee that cars with higher energy consumption pay higher taxes, this would be the most equitable arrangement. It would, however, also be the most difficult to manage because it would require the government to monitor each electric vehicle’s energy usage.
Governments may also think about taxing the purchase of electric vehicles in addition to these possibilities. This would assist in offsetting the cost of any electric car subsidies that are provided.
The optimal tax structure for electric vehicles is a complicated matter that needs some thought. Finding an easy-to-administer method for taxing electric automobiles is crucial, though.
Currently, the Indian government provides several tax breaks for electric cars. For instance, registration and road tax are not applicable to electric automobiles. Furthermore, a tax break of up to Rs 1.5 lakh is provided by the government for interest paid on loans taken out to buy electric cars.
Nonetheless, the government may impose a tax on electric cars in the future. A levy on the amount of energy used by electric cars is one possibility under consideration. Since it would guarantee that cars with higher energy consumption pay higher taxes, this would be a system. It would, however, also be the most difficult to manage because it would need the government to monitor each electric vehicle’s energy usage.
In the near future, the government is probably going to make an announcement about how it will tax electric vehicles.