Rise of electric cars will cost Belgium billions in tax revenue

The Belgian federal government will lose billions of euros in excise tax revenue on fuel in the coming years as more and more people trade in their diesel or petrol cars for an electric one, De Tijd writes on Saturday, citing several studies.

The number of electric cars in Belgium will increase sevenfold by the end of this decade, from 270,000 at the end of last year to 2 million in 2030. Two independent studies by consultancy firm EY and Transport & Mobility Leuven show that this transition will lead to a drop in tax and excise revenue for the federal government of between 1.4 and 1.5 billion euros. 

Today, the federal government still collects about 8 billion euros a year from fuel taxes. This year alone, revenues would be 160 million euros lower than in 2022, EY calculated. This figure already takes into account an increase in VAT revenue due to increased electricity consumption. 

"The Belgian authorities urgently need to review the existing tax mechanisms," EY partner Hendrik Serruys told the newspaper. "If this is not done, the risk of ill-considered and incoherent measures is high." Possible measures include higher taxes when buying a car, the introduction of a compulsory toll sticker for all cars, an increase in electricity taxes or a kilometre charge.

^{© JOHN THYS / AFP}