Can "cash for car" principle stop ballooning numbers of company cars?

The federal government has given the final go-ahead for the "cash for car" principle. This will allow employees with a company car to trade this car for cash; this sum will enjoy the same low tax rate as the company car fringe benefit, and will not be taxed like an extra salary - in Belgium taxes on labour are high, which is why employers are tempting candidates with company cars as a fringe benefit, rather than with high(er) pay, a situation which ran out of hand and caused extra traffic jams.

The principle has received the go-ahead from key ministers. The issue had been on the table for some time and is part of the "mobility budget" principle. In order to reduce congestion, employees should be able to choose more freely which type of transport they prefer. Employers should play a bigger role in the matter, but that's the general picture. The latest decision focuses mainly on company cars which are already there.

Under the "cash for car" system, owners of a company car can get cash if they give the car back. How much they receive, is being calculated using a complicated formula, but the final result should be the same from a financial point of view. Those with a company card for free petrol can get 20 percent extra.

It is hoped employees will voluntarily give up the company car, which will result in fewer cars on our roads. But nobody has to.

"We should have more ambition"

Federal MP and mobility expert Jef Van den Bergh is happy with the decision because at least things are moving, but he would like to go much further: "This is a first step in the right direction, the first step towards a sustainable and flexible mobility. However, the focus should be more on the mobility aspect, and not on the extra wage." Van den Bergh says the government should have more ambition than this.

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