Compromise reached in green car tax increase

State Secretary of Finance Eric Wiebes (VVD) and the coalition parties PvdA and VVD have reached an agreement on an adjusted plan for car tax and lease cars.

During the discussion of the Tax Plan, which contains the new rates for car tax and lease cars, the VVD raised strong objections to Wiebes' original plan. The Secretary of State has received a lot of criticism on the plan since. Wiebes will discuss the adjusted plan with the Second Chamber today.

According to the agreements, users of electric and hybrid cars will pay half of the normal rate of car tax. Fully electric cars are currently exempt from road tax, but that exemption will be removed.

Wiebes has agreed with the VVD and PvdA that there will still be five rates for the additional tax. Users of clean cars who close a new contract in 2016, will pay 4 percent in stead of nothing. In the original plan these lease car drivers would have paid 7 percent. Then there will be four more rates - 15, 18, 22 and 25 percent, as the car in question gets less environmentally friendly. Lease drivers with a hybrid car that uses both electricity and petrol, will pay 15 percent additional tax. In the original plan this was 14 percent.

With these agreements the Cabinet adheres to the agreements in the Energy Accord.

An alliance between the automobile industry and environmental organizations have come up with an alternative for the plans for additional tax and car tax. They want to increase the fiscal space between so called plug in hybrids and conventional cars by removing the 18 percent additional tax category. According to them this will prevent the "undesirable market disturbance". By removing the 18 percent category, plug in hybrids will remain more attractive to lease than ordinary cars.

This ad hoc coalition consists of the automotive industry (VNA, Bovag, and RAI) and a number of civil society organizations (VNO-NCW, MKB-Nederln, ANWB, Natuur & Milieu, Mileudefensie).