Tax advantage for company cars will eventually have to disappear, says Belgian PM

Prime Minister Alexander De Croo has spoken out on the ubiquitous practice of financing company cars for employees in Belgium, with growing data showing its environmental impact on the country, RTBF reports.

Speaking to RTBF's podcast Déclic - Le Tournant, he cites a study by the research firm Climact carried out at the request of the FPS Health - Environment, where experts considered various scenarios for achieving a carbon-neutral Belgium by 2050.

When it comes to the number of cars on its streets, Belgium needs to make a huge effort, with experts saying Belgium needs to reduce car ownership by three times what it currently is.

The obvious starting point is the car subsidy, proliferated by the tax advantages for company cars. For PM De Croo, "company cars are the legacy of a long fiscal evolution in our country."

The liberal politician, for now, has pushed back against the idea of getting rid of the subsidy altogether. Instead, he wants to use and transform the problem by turning the Belgian company car fleet "green".

"We have imposed that from 2026 onwards, all company cars sold will be 'zero emission'. This measure should not be underestimated. It's a quick way to transform the car fleet, since these are the cars that are renewed the most."

Nevertheless, the Prime Minister adds an important clarification on the philosophy of the system itself. "Shouldn't we eventually change the system and pay people with money and not with cars or cheques? Yes, of course... I agree with that 100%. But it has to be done step by step. I think the step we've taken now was a good step, to green the park."

De Croo believes that in the long run, Belgium will need fundamental changes to the tax system, but it "can't be done overnight... and certainly not in a time of crisis."

^{Belgian Prime Minister Alexander De Croo © Kenzo TRIBOUILLARD / AFP}