The EC is recommending that vehicle taxes are restructured so there is more emphasis on environmental objectives.
In particular it recommends the taxation of new passenger cars be more directly related to carbon dioxide emissions – only the UK currently does this.
The move is part of a new EC strategy on car taxation in the European Union that aims to remove the 'considerable tax obstacles and distortions' to the free movement of passenger cars within the internal market.
Taxation commissioner Frits Bolkestein said: 'I am determined to tackle the tax obstacles individual citizens and car manufacturers face within the internal market arising from 15 different systems of car taxation within the EU.
'All too often people have to pay through the nose when they move a car from one country to another. We also have to try to ensure that car taxes are more clearly geared to meeting the community's environmental objectives.'
The Commission added: 'We urge member states to take these recommendations into account when evaluating and revising their national vehicle taxation systems.' It added that it may propose legislation be introduced 'on the basis of these principles'.