Brussels sticks to ‘intelligent kilometer tax’ by 2022
The Brussels Region is moving forward with its road tax reform by presenting an intelligent kilometers tax project named SmartMove. SmarMove fixes the daily amount of €1 during peak hours (from 7 to 10 a.m. and from 3 to 7 p.m.) and €0,50 during off-peak hours (from 10 a.m. to 3 p.m.).
This is multiplied by 0 to six, depending on the car’s power and 9 to 18 euro cents (peak hours) on top per kilometer driven. Nights and weekends will be free of charge. Yet to be agreed within the Vervoort Government, this new tax system could be implemented as of January 2022.
Ever since this legislature took the reins in Brussels, there have been talks of a road tax reform in favor of less congestion and cleaner air. Mobility Minister Elke Van den Brandt (Groen) pushes for this reform, suggesting mobility toll, urban toll, or even a congestion charge.
However, after the Flemish and Walloon Regions closed the door on any kilometer tax, Brussels comes back to it with its SmartMove project. However, it should be made clear from the outset that the details of this reform are not yet the subject of a political agreement within the government of Rudi Vervoort (PS).
Replacing existing car tax
The SmartMove project, led by the Brussels Environment and Brussels Tax administrations, aims at replacing the current registration and circulation taxes with one intelligent kilometer tax system. But the exemption of road and registration taxes will only apply to Brussels residents. For all commuters coming from outside Brussels, this will come on top of regional car taxes.
The daily fee will depend on the hour, vehicle type, and the number of kilometers driven. In a nutshell, the bill should be heavier for those driving powerful cars during rush hours. The amounts of one euro in peak hours and half a euro during off-peak hours is to be multiplied by a figure ranging from zero to six depending on the vehicle’s power.
Basically: there will be no additional charge up to seven ‘fiscal horsepower’ but six times the basic rate from 20 hp onward. In addition to that, there is a charge per kilometer driven of €0,18 per kilometer during peak hours and €0,09 during off-peak hours.
In real terms, this means that taxes won’t be standardized anymore. They will depend on driving habits. Here are a few examples.
A retired man, driving a Fiat 500 (less than 7 fiscal hp), 500 km during peak hours, and 1 000 km during off-peak will have an average daily rate of 1,8 €/day. Driving 100 days per year, his tax will amount to €180 while before, he had to pay €61,5 for registration and €105,07 of road tax.
On the other hand, a worker driving a Ford Focus (9 fiscal hp) for 20 km per day at peak hours will have to pay €3,6/day. Driving 200 days a year, that amounts to €1 120 in taxes, compared to €867 (registration) and €292,38 (road tax) before.
The whole new tax system should base itself on two known technologies, a dedicated app and the network of ANPR cameras installed for the Low-Emission Zone. The app should allow drivers to enter their information and track the number of kilometers driven and the time.
The government studies the installation of an onboard unit for those who don’t have a smartphone. There are also propositions of a daily pass for occasional road users. It could range from 10 to 20 euros per day.
With the tax increase, the Brussels region hopes that congestion will drastically drop. Estimations are to be taken with a pinch of salt, but the region aims for a road traffic reduction of 10%, fewer ‘single passenger cars’ (-17%), and one third fewer hours lost in traffic jams. On the other hand, cycling should increase (+10%), and so should the use of public transport (+9%) and trains (+5%).
Before people’s behavior changes due to the different taxes, SmartMove could boost the regional budget revenues. The system would bring around €482 million per year, whereas the current tax system brings almost 200 million euros a year.
After the Low-Emission Zone, the Brussels government hits motorists once again with this new road tax project. However, there are still a few unclear patches, such as motorcycles. Some say they could benefit from a lower tax, as they don’t create as much congestion.
The biggest issue won’t be for Brussels citizens, but those who live in Wallonia or Flanders and work in the capital. Those motorists, who don’t benefit from the abolition of previous road taxes, such as Brussels’ citizen, will likely feel victims of double taxation.
There are also numerous legal pitfalls that the Brussels Region still has to overcome, such as incorporating leased cars into the SmartMove scheme. Furthermore, the higher circulation tax only for ‘luxury cars’ (above 16 fiscal hp) must be analyzed regarding the principle of equality and non-discrimination.
Finally, Brussels does only seem to consider the fiscal horsepower of cars, but what about the currently still powerful yet ‘clean’ electric and plug-in hybrid cars?