The Court of Audit concluded last week that car taxes in their current form are falling short of their goal. For example, there are insufficient incentives incorporated to contribute to the air quality and climate targets in the car field. What are the most important observations?
Although car taxes ensure a stable flow of income, they do not make a sufficient contribution to the other main objective - supporting air quality and climate goals.
In its recommendation to the State Secretary for Finance Menno Snel, the Court of Auditors therefore called on car taxes in their current form to be reviewed and "reconsidered if they do not contribute to the main goals of car taxes and have no current reason".
The question is whether with the planned increase in the number of electric cars in the future sufficient bpm and excise duties can still be collected. The course of income via the bpm is "erratic" anyway, according to the Court of Audit. While revenues fell from 1.49 billion to 1.11 billion between 2012 and 2014, they subsequently increased to 4.16 billion last year.
Although car taxes are also aimed at contributing to the reduction of CO2 emissions, the Court finds that there is no reference framework and the government has not worked out what it means by proper tax-driven incentives.
2018 car taxes received in millions of euros:
- Fuel duties: 8,338
- Addition of wage and income tax: 1,851
- MRB: 4,161
- BPM: 2,276
- Total: 16,626
'Government policy leans on indirect effects'
According to the Court of Audit, the government simply seems to assume that the fiscal stimulation of vehicles that are classified as sustainable automatically contribute to improving air quality and thus also climate goals.
"The fact that tax incentives are related to officially registered emission data, and not to emissions from different types of vehicles in practice, also plays a role in the consideration of policy theory. All this means that it is difficult to assess what contribution the provide incentives in car taxes ", as can be read.
The Court therefore looks at what is known as the point of application of the tax incentives in car taxes. At the bpm that is the purchase, while at the MRB that is the possession and the car weight. In other words, in both cases the actual CO2 emissions are not assumed.
As a result, according to the Court of Auditors, it is not possible to link taxation directly to the "polluter pays" principle, so that policy is in fact based on the indirect effects of fiscal incentives.
"Because the bpm and the MRB are fixed amounts, regardless of how much the car is driven, these taxes do not give any incentive to use a vehicle that has been chosen once less intensively, which would reduce harmful emissions," said the Court of Auditors' report. Higher fuel taxes would give the right incentive.
Fuel duties are the best levy according to use. (Photo: 123RF)
Consumers do not necessarily go for a clean car
Although it is of course conceivable that consumers will be looking for a car with the lowest possible emissions thanks to the specified CO2 emissions, the Court of Auditors believes that other behavior must also be taken into account.
You should think of driving longer with an older vehicle or importing a car from abroad. Indeed, the CBS notes that the average age of a passenger car in the Netherlands has risen in the past ten years from 9 to 11 years.
This is also due to the so-called young-timer scheme - the possibility of "driving a company car more than fifteen years old with a low current value" in private. Just like the aging of the fleet, this is bad news for the pursuit of cleaner air.
See also: As a self-employed person you should pay attention to this when you go for a youngtimer
Pick-up truck possible for entrepreneurs, not for individuals
Although the Court notes that fuel surcharge for diesels is included in the bpm, the differences between diesels are not taken into account. For example, only the most modern engines score well when it comes to emissions of particulate matter and nitrogen oxides.
In addition, the report states that company cars of entrepreneurs are exempt from bpm. This would enable them to drive a large American pick-up truck, while this is not possible for a private individual due to the discouragement policy.
The Court also notes that the additional tax regime for business drivers has fallen into an "incentive to use the company car for private use and not to use alternatives."