Company cars cause loss of €2 billion in tax revenue
Wednesday, 18 October 2017
Company cars are costing €2 billion in lost state revenue. This emerges from a study produced by the Brussels Studies centre, the results of which were published in Le Soir on Wednesday. By comparison, this total equates to half of the overall budget for the present RER project. Despite low official figures across the Belgian system for company cars, the study assesses the fleet using various indices, and considers the budget impact of the policy favouring the use of the company car.
According to these estimates, a car of reasonable size costs an average of €3,500 to the state budget. Xavier May, a researcher from ULB (the Free University of Brussels), explains, “This represents an annual tax loss of more than €2 billion.” Yet the state has a shortfall of €1 billion to complete the current RER project, with an overall budget of between €3 and €4 billion.
The system also has an issue of tax fairness. The researcher goes on, “The company car system is both inequitable and costly. We know that this, in particular, is to the advantage of a certain category of individuals. It is difficult to justify, but is firmly rooted within the Belgian system.”