New car sales tax to be reduced

The tax on new cars (bpm) will probably be reduced to around 25% of current levels by 2016, cabinet sources tell Friday’s Telegraaf.


At the same time, the cabinet plans to phase in a new tax on motorists, based on the number of kilometres driven.
Sources tell the paper that ministers will review the effect of the switch to a kilometre tax on the economy in 2016.
The sales tax currently raises some €4bn for the treasury. The Telegraaf says finance minister Wouter Bos wants to keep the tax, fearing that a high charge on the distance actually driven – some eight cents per kilometre – would have a serious effect on driving habits and reduce income for the treasury as a result.
Earlier this month, three of the government’s main advisory bodies warned that a tax on actual driving would reduce the number of short car journeys and cut tax income from petrol levies.
If the results of the evaluation are positive, the sales tax – currently 42% of the catalogue value of a new car – will be phased out altogether.
A spokesman for the transport ministry declined to comment on the reports.

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