Due to an error in the calculation of a tax reduction for electric cars, Finance Minister Eelco Heinen was faced with a significant setback of 1,5 billion euros in the budget.
The tax benefit for electric cars is being phased out faster than originally planned, due to a miscalculation in the tax credit. This miscalculation has caused the government to lose more money than expected, which is why the scheme is being adjusted. The news came to light by reporting from De Telegraaf, after which the Ministry of Finance confirmed the information.
Currently, owners of electric vehicles enjoy a significant advantage: they do not pay road tax. This can save them hundreds of euros per year and was intended as an incentive to promote electric driving. Originally, this advantage was to last until 2026, but the Rutte IV cabinet decided to extend the scheme and introduce a gradual phase-out until 2031. This decision was part of the broader strategy to achieve climate targets by encouraging zero-emission vehicles.
However, during the extension of the scheme, an important detail was not taken into account: electric cars are on average heavier than regular cars, mainly due to the weight of the batteries. In the Netherlands, the amount of road tax is partly determined by the weight of the vehicle. The heavier the car, the higher the tax. As a result, the final reduction in road tax turned out to be higher than originally calculated.
popularity
In addition, the popularity of electric cars has exceeded expectations. More electric vehicles have been sold than was anticipated in the original plans. This combination of heavier vehicles and a larger sales market has led to a financial setback for the treasury. In total, this involves a cost item of 1,5 billion euros, an amount that was not anticipated when the budget was drawn up.
To compensate for this setback, Finance Minister Heinen has decided to phase out the tax reduction for electric cars more quickly. The original plan provided for a gradual reduction of the reduction: first to 75 percent, then to 40, 35 and finally 30 percent in 2031. The new plan accelerates this reduction. From next year, the reduction will be reduced to 75 percent, the year after that to just 25 percent, and in 2031 the reduction will be abolished completely. The ministry states that this adjusted reduction is sufficient to close the financial gap of 1,5 billion euros.
At the moment, owners of electric cars benefit from an attractive scheme whereby they do not have to pay road tax. This tax benefit was introduced to stimulate the switch to electric vehicles and contributes to achieving the climate goals.
The new phase-out path applies to both people who already own an electric car and to new electric drivers. This means that everyone who purchases an electric car in the future will be faced with a significantly lower discount than initially expected. This could mean that the popularity of electric cars will increase less rapidly in the coming years than in the past period. Nevertheless, the government continues to adhere to the idea that electric driving is the future and is crucial to achieving the climate goals.
tax rules
The question now is how the electric car market will develop with these adjusted tax rules. The reduction of the tax credit could possibly influence the purchasing decisions of consumers. Electric cars are known to be more expensive to buy than petrol or diesel cars, and the tax benefit was an important motivation for many consumers to opt for an electric car. With the accelerated reduction of this benefit, the financial difference between electric and conventional cars is becoming smaller, which could reduce the appeal of electric vehicles.
At the same time, the government continues to stimulate electric driving in other ways. For example, there is a subsidy available for private individuals who buy an electric car, and charging stations are being installed rapidly throughout the Netherlands. It is also expected that the price of electric cars will fall in the long term, partly due to technological developments and economies of scale. This could mitigate the impact of phasing out the tax reduction, but it is still too early to draw definitive conclusions about this.
