New tax system increases Dutch CO2 emissions

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In 2015, the average new car in the Netherlands emitted 101 grams of CO2 per km. For the third year in a row, the Dutch new cars had the lowest CO2 emissions in the EU. For comparison: emissions in Germany were at 128 g/km and in Belgium at 133 g/km, writes

The Netherlands have made great strides in CO2 reduction thanks to a strict, well-designed tax system that targeted cars in direct relation to the amount of CO2 they emit. 

That system, the so-called ’bijtelling’, has been modified starting this year: all fossil-fuel vehicles are taxed at 22%, and only full-electric vehicles are able to claim a much lower tax rate. As a demonstration of the impact of fiscal policy on emissions levels, the average CO2 emission level of new cars in the Netherlands has immediately gone up again, and is now at 110 g/km.

Another example of the drastic influence of auto taxes comes from Belgium, which has drastically increased various taxes on diesel cars. As a result, only 22.9% of private car purchases in the first half of this year in Flanders were diesel, against 37% in the same period last year, reports De Standaard. 

As recently as 2010, no less than 62,9% of private consumers chose diesel for their new car. In Brussels and Wallonia, where some taxes are calculated differently, the share of diesels in new-car sales is still at 45% for the private market. 

The Belgian corporate fleet is also following the trend more slowly. No less than 72,5% of new vehicles for professional use in the first half of this year were diesels, a relatively small decline from 78% last year. The reason – diesel is still relatively attractive from a fiscal point of view. On the other hand: almost five percent of the new corporate vehicles in Belgium are hybrid, with gas- and electricity-powered vehicles representing  1%.

Image: public domain

Friday, September 23, 2016 - 11:15Frank JacobsTaxation and LegislationNetherlandsBelgium