Taxing policies for passenger cars

A study on the effects of an alternative variant in the framework of the 2nd Car Memorandum

The so-called 2nd Car Memorandum (Autobrief 2) lays out the Dutch government’s plans for passenger car taxation in the period 2016-2019. One of the main aims of these plans is to resolve the shortcomings of the current set-up (including non-robust tax revenues), while, ideally, retaining its strengths, as the ‘greening’ of car taxation between 2008 and 2014 has proved highly effective in reducing the CO2 emissions of (new) cars. Maintaining an effective CO2 incentive in car taxes can make a major contribution to securing the transport CO2 targets set in the Energy Agreement brokered by the Netherlands Socio-Economic Council.

In this study, carried out for Louwman & Parqui, CE Delft outlines and quantifies an alternative tax package that leads to: 
  • more stable and higher tax revenues
  • robust cuts in CO2 emissions, in line with the ambitious targets of the Energy Agreement
  • improved air quality
  • removal of serious distortions in the auto market. 

Using the DYNAMO 2.3 model developed specifically for passenger cars, the impacts of the proposed package on the vehicle fleet, on environmental quality and on the budgetary dimension were calculated for the year 2020.

Taxing policies for passenger cars (only available in Dutch)

Authors CE

Huib van Essen
Arno Schroten

Delft, June 2014