Wallonia finally approves 2025 car tax reform (update)

On Wednesday, Wallonia’s road tax reform was voted in the plenary session of the Walloon parliament. Pushed by Mobility Minister Philippe Henry (Ecolo), the reform has been modified. It aims at taxing cars at registration not only based on their engine size and CO2 emissions but also their weight, which also affects electric vehicles. Taxes can range from 50 to 9 000 euros.

For the opposition, this reform is an aberration as it will push those seeking electric cars, which are heavier yet more ecological, towards leasing companies, which are all based in Flanders. The yield from this tax risks being passed on to those who can’t easily afford it. Les Engagés voted against it, while the communist party PTB abstained.

Long-awaited tax reform

Nothing is ever easy in Belgium, especially when it comes to taxes. For vehicles, three different tax systems have been implemented for years. Wallonia has always been the ugly duckling, with an outdated system that still taxes depending on engine size and power.

Tax reform was always on the table, but nothing was ever concretely done. Even for this tax reform, the preliminary draft dates back to 2022 and has been abandoned under the previous legislature. Since then, Philippe Henry (Ecolo) has stuck to his guns.

CO2 and weight

Starting from a comprehensive package, the current reform proposition now only acts on the registration tax, not the annual tax. To be introduced on January 1st, 2025, it will tax the vehicle’s power, CO2, and weight. All is multiplied by a coefficient, which is higher for diesel and petrol cars (1,0) and lower for electric (up to 0,26) and PHEVs (0,8). Large families will benefit from a 100 € reduction.

Febiac, the Belgian automotive federation, is flabbergasted. This reform penalizes power and weight, two factors inherent to electric cars, which Belgium and Europe are pushing for. Although, the federation has managed to lower the correction coefficient, especially for small electric cars.

What about leasing?

There’s another issue with this tax reform, pointed out by the opposition. With a more stringent road tax, leasing becomes an interesting option for numerous drivers. However, most, if not all, leasing companies are based in Flanders, and that’s where their vehicles are taxed.

Walloon MP Jean-Luc Crucke (Les Engagés) says this half-reform is laughable as it will push those seeking more expensive vehicles towards leasing in Flanders. He even estimates the loss to be 40 million euros.

“Flanders is preparing for another form of taxation, based on usage, similar to the one Brussels is considering. We’re losing a bargaining chip, and we’re going to isolate ourselves even further. This reform is not credible. It won’t stand up”, concludes Mr Crucke.


Ready to join the conversation?

You must be an active subscriber to leave a comment.

Subscribe Today

You Might Also Like

%d bloggers like this: