Tax changes will make traffic gridlock worse

6 February 2004

AMSTERDAM — The government’s recent changes to motor vehicle taxation will lead to increased traffic jam on the nation’s already congested motorways, the Central Planning Bureau (CPB) has warned.

The CPB said the Cabinet’s tax plans will fiscally stimulate the use of lease cars, leading to a strong increase in traffic on the nation’s roads and therefore worsening environmental damage, newspaper De Telegraaf reported.

The forecast from the government’s economic advice institute spans a period of 10 years and is being discussed by government minister’s during their weekly meeting on Friday. The CPB estimates could spark conflict between the Transport and Finance Ministries.

The CPB warns that traffic jams could increase by 9 percent during the next 10 years because employees will financially assist workers with motor vehicle costs more than Finance State Secretary Joop Wijn had calculated.

On the other hand, Transport Minister Karla Peijs is pumping large sums of cash into the nations roads to try and break the gridlock over the next four years. She will not welcome an increased number of company cars on the motorways.

The government’s tax changes came into effect on 1 January and classify home-to-work commuting as business travel. Employers can only pay a tax-free compensation to workers of EUR 0.18 per driven kilometre, compared with a previous EUR 0.28 per kilometre.

Subject: Dutch news