VAT on bicycles will not be reduced

VAT on bicycles will not be reduced
© Belga

After much discussion by ministers about lowering VAT on bicycles and electric bicycles to 6%, it has now been decided that this will not happen, according to a Royal Decree.

State Secretary for Budget Eva De Bleeker (Open VLD) emphasised in a reaction on Thursday that the resources remain, but that they will be spent differently, Belga News Agency reports.

In 2019, the government unanimously approved a proposal to reduce VAT on bicycles and electric bikes from 21% to 6%, with the aim of encouraging more people to opt for bicycles as a means of transport for short and medium trips.

The measure only needed the approval of the European Commission, which it received in the meantime, but now the government decided to backtrack.

No change to budget, but different interpretation

“After reassessing budgetary priorities, the government has decided to drop the 6% preferential tariff scheme for bicycles and electric bicycles,” reads the decree.

During last week's budget review, the government considered how to use the registered funds as efficiently as possible to achieve the original aim of getting more people on their bikes, but without the VAT reduction.

“We’re only improving the way the money is used, by focusing very specifically on where the greatest challenge lies: in commuting,” De Bleeker said.

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“For every person who gets on a bike, there is one less car in the morning and evening rush hour. That is good for human and environmental health and for our economy. So the €80 million that were originally provided are still provided and are now being put to much better use.”

De Bleeker pointed out that the sector itself was not immediately in favour of the measure.

“They wondered whether the measures would not simply lead to price increases so that the consumer would not feel the effects of the measure at all.”

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