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"Pay-as-you-go" tax for Dutch drivers
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The Hague, Netherlands
The Hague, Netherlands

"Pay-as-you-go" tax for Dutch drivers

Published on : 17 November 2009 - 12:12pm | By Paddy Maguire
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The Dutch cabinet has approved a 'green' road tax, which aims to charge motorists for every kilometre they drive. With plans to charge three euro-cents per kilometre for a standard family saloon in 2012, the scheme will see ownership and sales tax scrapped. The new measures aim to cut carbon dioxide emissions by ten percent and to halve traffic congestion in the Netherlands.

ANWB is the Netherlands’ biggest motoring organisation and represents some four million drivers. Ferrie Smit is ANWB’s manager for public affairs and he told RNW that while the group approves the scheme, it does have concerns that it has raised with the government.

"From the motorists’ point of view, certain things are not yet clear. Will they be paying more for mobility? There are privacy issues – and the question over how this tax will be imposed on foreigners is also not yet clear."


GPS

As is stands, GPS devices will be installed in cars to track the vehicle’s movements. The data will be sent to a central billing agency and the money will be deducted from drivers' bank accounts. As a result of privacy concerns over data protection, the information will not be stored. The charge per kilometre will vary depending on the type of car – with gas-guzzlers paying more than those who drive fuel-efficient models. It will also be more expensive to drive during the rush hour.

The issue over non-Dutch drivers on the roads has not yet been resolved, but while there are teething problems, Mr Smith feels that the scheme could be beneficial – both to the taxpayer and the environment.

"I think it’s a good contribution to the societal goals we have in the Netherlands to reduce pollution and to reduce traffic jams. Large numbers of motorists will pay less than they do now, as the new system aims to have a more honest way to paying for your mobility. If you drive more, you pay more, and if you drive less, you pay less."


Friends of the Earth less enthusiastic

But not everybody is convinced. Ivo Stumpe is a campaigner with Milieudefensie, the Dutch branch of environmental group Friends of the Earth. He says that the result may be the opposite of what's intended.


"The effect will be to decrease taxes when you buy a car. This will probably lead to people buying bigger cars and heavier cars with more fuel consumption. We think that the environmental impact will be negative rather than positive."

Not only does Milieudefensie see people buying heavier cars if the tax breaks make them cheaper, the organisation also thinks the scheme may even lead to more kilometres being driven on the roads.

"The whole aim is to reduce traffic in rush hour and to spread it over the day more evenly because rush-hour traffic will be charged at a higher price. The effect in the end will be that road use is spread over the day, so ultimately road capacity over 24 hours will also go up."

Germany watching with interest
While not everyone is convinced, other European countries are paying attention to the scheme. Germany’s Green Party is already pushing the government to follow the Dutch model in a bid to end Germany’s very heavy car taxes.

Back in the Netherlands, the bill needs the backing of parliament before it becomes law. If the law is passed, the Dutch could be charged by the kilometre as early as 2012, with the tax increasing every year until 2018, when it will cost an average of 6.7 cents per kilometre to drive in the Netherlands.
 

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Discussion

Steve 18 November 2009 - 5:01pm
Saloon should be sedan in the second sentence. Leave it to a government to create an extremely wasteful government bureaucracy to solve a simple problem. If the goal is, "If you drive more, you pay more, and if you drive less, you pay less" then this can be achieved with a simple gas tax. Congestion reduction during rush hour could be achieved by using a system similar to London's (in the city center) or by building tolls on the Autobahns that charge more during rush hours (tolls can be easily automated so as not to slow traffic). I am not advocating any of these solutions, just pointing out that there seems to be easier ways to achieve the desired result. It seems like forcing every person to have a GPS unit installed on their car is a little intrusive in my opinion.------------------------Good points MarkA
MarkA 18 November 2009 - 12:30pm
There are a lot of questions I have, posed by this change: 1) How will the ‘average’ motorist be defined, the ‘average’ route and the ‘average’ car? There is a great degree of ambiguity in the statements. The costs to the motorist are presented in their lowest possible level (only 0.03 cents in 2012) and then the benefits are presented at the highest possible level. But reading this article and others on AP news wire and you see that the 0.03 cents is just the start. If you drive a greater polluting car (than the ‘average’), what-ever that means - considering the blatant manipulation of energy labels by car manufacturers - then you pay more than the 0.03, if you drive at peak times, then you pay more, if you drive on roads that the government deems are usually busier then guess what? - you pay more. This seems grossly unfair to the population living in the randstad where the majority of the countries inhabitants live, compared with those who live in less densely populated areas. 2) What EXACTLY will we be paying every month? Certainly not 0.03 and certainly not 0.067. I currently pay 84 Euro per month in road tax for my car - under the new scheme - if I drove the same amount of KMs as I do now (and I work partially from home when I can) I'd run up 75 Euro per month in KM charges under the 0.03 rate – looks good so far - but of course it’s in the details that it all goes wrong for the motorist, my car isn't large, or a heavy polluter –it’s just a BMW 3 series, but it’s not energy label A because it’s a bit older. I drop my children off at school, I drive the A4 most days and on occasion I have to make a meeting that requires me to drive at peak times and then meet with customers at their premises later in the day (so, I’m hardly a candidate for the train – but probably fairly representative of most people in a modern workforce)... so how much will I really be paying extra? – I’m sure more than I currently pay that’s for sure. And then when they double the rate, I'll end up paying a good 100 Euro per month more than I do now (and that is the best case) – 1200 Euro a year more than now. Hardly fair hike in taxes. 3) What will they do with the tax on fuel? Surely the current tax on fuel IS a ‘pay as you go’ tax – so now, are we to be taxed double for the same thing? 4) Then there is the point about purchase tax. The AP report stated it would be removed, now I read it will be *reduced*. Great. Not that I’m a car dealer sympathiser, but can you imagine the effect that would have on 2011 Dutch car sales? It would kill them dead. – These are people’s livelihoods – will they be compensated for such a drastic introduction? 5) Again on the removal of purchase tax, this is a double edged sword, in one blow it will wipe the value of every used car in the land by at least the amount they *reduce* or remove it. – Will I and other motorists be compensated for that reduction? What about people who are in final purchase finance schemes for their cars – they will be left negative equity on their cars at renewal time – Will they be looked after? On the other-hand it makes a new car much more attractive, but of course - that means a new car then must be manufactured, which has a massive environmental impact - far more than keeping and running an older car in terms of total environmental impact from cradle to grave – because that manufacturing impact has already happened - but of course, since The Netherlands has a minority car manufacturing business, that whole issue becomes another country's problem... hardly a social neighbourly viewpoint. 6) And what about the Kilometers spent driving in diversions because of road closures? Again if you live in the randstad, the local governments seem never to be done digging up roads and making people drive way out of their way just to get anywhere – who pays for those Kilometers? The Kilometers I didn’t chose to drive? 7) And then there is the data and privacy protection elements - we are told that our information will be safe and not be used for any other purposes... but that coming from a country that statistically taps more phone calls than any other country in the world. Then we are told that we will face prison and huge fines if we should tamper with the ‘mandatory device’ – how would they know? Would they start co-relating registration number plate data on the overhead gantry speed controls with the data coming out of the box for discrepancies? (isn’t all that data supposed to not be stored?) And then there are questions about the other things this data could be used for. Speeding fines? Person tracking? 8) Non registered vehicles. The Port of Rotterdam and our ferry terminals, guest workers and tourists all mean that our roads are busy with traffic from other countries. Will they pay too? If so, will that mean, that our industry will be affected by people choosing another port, another route or another city to visit – when they most pay to use our roads? 9) Revenue or green measure? I’m confused about this one. AP newswire articles mention that the Government could up the charges if the revenue from the scheme is not sufficient. Is this a revenue generator or a green measure – it can’t be both. If it’s a green measure, surely one of the side effects will be that revenue from the scheme will fall as people use the roads less frequently – so does that mean as it works we all get taxed more? 10) Just how environmentally sound is a train anyway? We are all to use public transport more. Okay I get that, but how environmentally sound is the train? Trains work on schedules, there are very busy trains at peak times – the same peak times we need to drive our cars – so they will get busier, but trains running at off peak times are hopelessly underutilised – but they still run because of the schedule and use the same amount of energy as in peak times. Looking at the whole day and weekends, looking at the energy usage and CO2 output needed to power it per passenger and then comparing it with a car that is only used when it is needed – the train doesn’t look so good environmentally.

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