Car lobby, green groups come up with alternative company car tax plan

An unlikely alliance of environmental groups, business groups and the car lobby have worked out an alternative system for increasing taxes on company cars, Nos television says on Monday.

They want to increase the difference in tax on hybrid and conventional cars to stop the ‘undesirable market disruption’ which they say tax minister Eric Wiebes’ proposals will have.

They also say fully electric cars should not have to pay any road tax at all and hybrids should pay half the tax of conventional cars.

Revised plan

Wiebes is due to publish a revised plan later on Monday, after his first proposals to increase company car taxes were condemned by members of his own party.

The Volkskrant reported in March that tax breaks on hybrid and fully electric cars cost the Dutch treasury €500m last year. Last year, 22,000 hybrids and electric cars were sold in the Netherlands, many more than before the tax breaks were introduced.

Lease car drivers can avoid paying tax for their company car – up to 20% of the catalogue value – if they drive fewer than 500 km a year privately. Drivers have to keep a logbook of their car usage.

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