Belgium’s plan to make the federal mobility budget compulsory for employers offering company cars could punch a hole of up to €1 billion a year in federal revenues, according to calculations by consultancy EY seen by De Tijd.

The figure is striking, but it is not a forecast: it represents a scenario in which one in five company-car users gives up the car altogether. EY is Ernst & Young, one of the world’s “Big Four” audit and consultancy firms, alongside Deloitte, PwC and KPMG.

EY estimates that at today’s roughly 4% take-up rate, in which employees exchange their company car for a car-free mobility budget, the federal government already forgoes around €200 million a year in car-related taxes.

If that share climbed to 20%, the level policymakers once hoped the mobility budget could reach, the loss could rise to €1 billion.

The calculation includes lost fuel excise duties and VAT, the CO2 solidarity contribution paid by employers, and personal income tax on the company car benefit-in-kind.

It also assumes that employees who give up their company car do not subsequently buy a private one. That makes the billion-euro figure a scenario rather than a net budget estimate.

Mandatory, but not yet law

The paradox is that the government itself wants the scheme to become much more widespread. A draft law approved by the federal cabinet in January would oblige employers that have provided company cars for more than 36 months to offer a mobility budget.

Companies with at least 50 employees are due to enter the system from 1 January 2027, followed by employers with 15 to 49 workers in 2028. Smaller companies would remain exempt.

However, the reform is not yet final legislation. The January text is still a draft and was sent to the Council of State and the social partners for advice.

KPMG likewise stresses that the compulsory system remains subject to the legislative process. So 2027 is the government’s intended starting date, not yet unconditional legal certainty.

Housing dominates

Another issue is that it overshadows the original mobility objective. The budget can be spent on an electric company car, public transport, bicycles, and other sustainable mobility options, but qualifying employees can also use it for rent or mortgage payments.

Housing is already emerging as one of the mobility budget’s most attractive uses. As newmobility.news reported in August, SD Worx payroll data show that three out of four mobility-budget users choose to have housing costs reimbursed, underlining how strongly the scheme is evolving beyond traditional mobility spending.

A recent KPMG study, based on data from 302 employers and 4,389 employees, found a similar figure: almost three-quarters of users in its dataset used pillar 2 for housing costs. Housing represented 86.7% of all spending in that pillar, and around 45% of users devoted it entirely to rent or mortgage payments.

That explains why EY tax expert Hendrik Serruys is calling for safeguards, such as limiting the share spent on housing. Belgium’s social partners have already reached the same conclusion.

In a unanimous April opinion, the National Labor Council and the Central Economic Council proposed capping housing expenditure at 50% of the mobility budget, warning that otherwise the system risks becoming wage optimization rather than a tool for changing mobility behavior.

Tax system caught in its own success

The debate exposes an awkward contradiction in Belgian company-car policy. Governments have spent years encouraging employees to switch from salary cars to reduce congestion and emissions, yet those cars still generate substantial tax, social security, and fuel revenues.

That contradiction has become politically explosive again. Salary cars resurfaced this week in Belgium’s federal budget talks, after proposals to reduce or abolish their favorable tax treatment.

A Federal Planning Bureau study estimates that the current system represents around €5.2 billion in foregone fiscal and parafiscal revenue by 2028, compared with taxing private use as with a normal salary. That does not mean €5.2 billion could simply be recovered overnight.

EY’s new calculation shows the other side of the same puzzle: if the mobility budget succeeds in persuading large numbers of employees to give up their company cars, the government could lose up to €1 billion in taxes and charges those cars currently generate.

And if much of the budget instead goes to tax-friendly mortgage or rent payments, the mobility benefits may be smaller than intended.

With the mobility budget set to become mandatory for more employers, Belgium faces a difficult balancing act: reforming a salary-car system that is fiscally expensive while avoiding a new revenue hole when employees actually abandon their cars.