Luxury Tax: How They Did It and How It Should Be

Cars with a value of 3 to 10 million rubles purchased from January 1, 2022 are not considered luxury – you will no longer have to pay increased road tax for such cars. Finally, the “luxury threshold” of 3 million rubles that has existed since 2014 has been raised. However, is it the right approach to unambiguously link to the price that a car belongs to luxury?

Of course, every few years (or maybe more often, given the current volatility of the Russian currency) it is possible to legally rewrite the addition limit. But specialists of the digital platform #Bankavto believe that there are at least two better options.

By engine power

By recognizing a car as a luxury based on its engine power, it really makes sense. New cars with 400-500 hp under the hood, had a high price in 2014, and now have one. The capacity-related factor would thus be more selective, stable and independent of price fluctuations.

After all, a comparable classification is used when calculating the transport tax. Therefore, for cars whose engine power exceeds a certain limit, a multiplication factor could also be introduced in the calculation of the luxury tax in addition to the transport tax.

By brands and models

Individual brands can also be labeled “luxury” – Bentley will not produce budget sedans and Bugatti will not produce affordable coupes, Bankauto experts believe. In addition, one can also introduce differentiation with regard to models. That is, budget brands (for example, Lada) should be left with a basic transport tax, it is more expensive for brands to distribute the lineup (BMW 1 series is not a luxury, but the 7 series certainly belongs), and the most expensive (say Porsche, Ferrari, Lamborghini or Maserati) are completely categorized as “sub-tax”.

It is possible to go even further and make a gradation of the rising rate within these new categories. In the category of the most luxurious brands, the “expensive but not too expensive” BMW X7 will have a lower coefficient, and the higher will be for cars that are clearly expensive, such as the Bentley Bentayga and Lamborghini Urus.

Such a classification system, according to Bankavto, will allow the tax to realize its original intention as best as possible.

  • By the way, the Bankauto marketplace has recently appeared in 4 more regions.
  • “Driving” can be read in Viber.

Source: Z R

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