Nova workboard

a blog from young economists at Nova SBE

Belgian traffic congestion tax

Many residents and foreigners are annoyed by the traffic congestion in Belgium. A survey in 2014 of Inrix revealed that the two biggest cities in Belgium, Antwerp and Brussels, are the most congested cities in Europe and North America. They measured the total hours wasted in traffic in the peak hours of the day between 6 and 10 a.m. and 3 and 7 p.m. In Brussels people wasted about 82,9 hours each year and in Antwerp 78,1 hours. The main reason for this is that jobs are concentrated in the city centre and people don’t want to leave their home town to live there. There is also a so-called ‘anti-urban’ mentality because they want a detached house with some green space around. The Belgian government wants to do something against this problem and elaborated a plan consisting a tax per kilometre ridden on the Belgian roads. However, this plan is not approved yet.

How does this tax work? They do not only look at the kilometres you cover. It is a smart kilometre tax. It is a combination of several factors including the mileage but also type of the road and moment of the day (stringent during rush hours). The costs have not been fully determined but there is reported that they want 9 cents/kilometre in city centre, 4,5 cents on the highways and 6,5 on other roads. Of course, it also depends on the moment of day which can entail an extra cost. In addition, driver must purchase a small device who can measure the driver’s activities which is a cost of €250.

Driving has a cost for the Belgian government such as wear and tear of the roads, infrastructure and environmental problems due to the emission of CO2. By limiting traffic, lots of these costs could be declined and it would result in less accidents. This tax measure would be a shift from owning a car to using a car. Think of elderly people, young people and city dwellers who have less intention to use their car. It could also stimulate use of car sharing. This measure would also force foreigners to pay for the maintenance and road infrastructure. In 2016, the government introduced a tax for trucks and the yield of this measure was €181 million that they could invest in a cycling network or adding to the government’s budget. A study of Stratec also revealed that, by introducing this tax, there would be 10% less traffic in Brussels.

There are some difficulties and disadvantages by introducing this tax. Many employees nowadays have a company car and therefore the costs would be passed on the employer who will have to bear this additional burden so for these employees there will be a little change in behaviour. The economic burden of this tax could affect the competitiveness of the Belgian companies. Another disadvantage is that people who live at the countryside should make the largest contribution and this would be a great cost for them with a decrease in purchasing power as result. The low yields for the government is another issue. According to a report of the Flemish minister of mobility Weyts, [1] the yields of this measure would be only €135,9 million annually. But in this case, this tax should be considered as a mobility measure to relieve traffic in busy cities.

However, the Belgian minister of mobility Bellot is not fond of this plan. His said that this would make living at the countryside impossible. But early September, the European Commission announced that in the long-term all countries must introduce a mileage charge according to an article on Let’s see who keeps the promise!


Author: studentnovasbe

Master student in Nova Sbe

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