All About Kilometer-Based Taxation in Practice

Today, February 17, marks the start of the practical test of the kilometer taxation, this highly controversial government project. In practice, 1,200 people will test from this Monday the kilometer taxation which consists of paying up to 9 cents per kilometer traveled within the RER zone (Brussels, its periphery, and the areas covered by the future regional express network), against 5 cents on the highway and 6.5 on other roads. A rate adjusted according to the time of traffic and the characteristics of the vehicle. After a month of training, the actual test will last a month. The results are expected in mid-May. This is indeed a test. No decision has been made by the different regional governments. An article from Crédit Populaire Européen

In Brief

Driving in urban areas could in the future cost 9 cents per kilometer, against 5 cents on the highway and 6.5 cents on other roads. The principle provides for a car tax on each kilometer traveled, depending on peak hours and the type of road taken by the driver. The tax will be more expensive during peak hours – from 7 am to 9 am and from 4 pm to 6 pm – and motorists will be able to drive for free between 10 pm and 5 am. During peak hours, the amount will reach 9 cents per kilometer in urban areas. The calculation of the fee will be done using a GPS that will calculate the distances traveled. Its implementation would be facilitated today by the GPS systems that will be installed from 2015 on all new cars to allow the installation of the European automatic emergency call system. On the device’s screen, the vehicle’s location is displayed as well as the price of the road being taken. The possible implementation of this kilometer taxation, which will be tested for two months, will not be possible before 2017.

A Project That Is Not New

This project originates from an agreement concluded in 2011 between the three Regions regarding the taxation of heavy goods vehicles. The idea had been in the air for about ten years. It was the consultant PwC who proposed this idea, and it was presented, on behalf of car importers, by Fébiac last October.

The Polluter Pays Principle

The principle is logical and already applied through excise duties on fuels, VAT, and maintenance and spare parts or new insurance formulas: the more you drive, the more you pay. This project is supported by Beci, Voka, Touring, or VAB and aims to establish car taxation based on usage rather than ownership. It aims, of course, to replace existing taxes and replace the flat-rate road tax. Other objectives: encourage drivers to use public transport more or to plan their trips at other, less congested times, which are more fiscally advantageous. Similarly, one of the essential objectives is to find a solution to the congestion of urban centers and more specifically to traffic jams in Brussels.

A Contested Project…

Public opinion reacts quite negatively. Comments are flourishing everywhere on social networks, and a km tax petition is circulating, currently gathering nearly 167,000 signatures. Opponents see it as discriminatory taxation that would mainly affect those who drive many kilometers a year and live far from urban centers. In itself, this consequence is logical, but its Achilles’ heel is that it would seem to mainly affect low incomes, that is, those who have chosen to buy their house a little further away to reduce the purchase price. This is a significant unintended consequence. As a result, many politicians and almost the majority of political parties say they are… opposed to this project. It must be said that the prospect of upcoming elections hardly encourages politicians to take risks. But in absolute terms… encouraging motorists to drive less is a project that also has its reasons for being.

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