'Green' tax to apply to commercial vehicles as well

21st November 2011, Comments 0 comments

The government of Flanders finally approved  reforms to vehicle registration tax  IPI on Friday. As from 2012, the IPI, a one-off tax on the registration of new vehicles, will be based on the emission of CO2, particulate matter and on the Euro standard, a measure which considers air quality. Currently a car’s engine power is the only consideration. Initiated by the ministers of the government of Flanders, Joke Schauvliege CD&V and Philppe Muyters N-VA, this drive is intended to produce a greener vehicle fleet. The first proposal, which resulted in a higher IPI for many smaller family cars and a drop in several thousands of euros for some luxury models, met with considerable criticism in July this year. “We have adapted the formula to eliminate such consequences,” says Muyters. Moreover the minimum tax of 61.50 euros will be reduced to 40 euros while the upper limit will remain at 10.000 euros. The “social factor” included in the proposal is the regulation applicable to second-hand cars. “As people cannot all afford a new car, we will phase in a rebate on second-hand vehicles,” says Schauvliege. It’s interesting to note that non-leased company cars will also fall under the new legislation following the State Council’s decision that this part of the responsibility and competence comes under the government of Flanders. As far as the IPI on leased vehicles is concerned, the government of Flanders has to meet with the other regions to change the decree. The exceptional measure will not apply to the 30.000 non-leased company cars, which are second-hand. “This could make certain cars unfit for resale,” Federauto reacted with anger. The Belgian confederation of car retailers is not the only one to be upset. Negative comments have also come from the Flemish opposition, the Flemish environmental umbrella organisation Bond Beter Leefmilieu and mobility associations. Even though Schauvliege and Muyters insist that the reform is budget-neutral, it is attacked from all sides as “a blind tax hike”, with various parties pointing to the fact that diesel vehicles, which are responsible for more pollution that petrol-driven vehicles, are once again being favoured.

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