Dutch Government To Revolutionize Vehicle Tax Collection

by Ulrika Lomas, Tax-News.com, Brussels

13 February 2002

The Dutch Government recently announced that it has approved a plan which will revolutionize the way in which road and vehicle taxes are collected.

Currently, Dutch car owners pay a 25% sales tax on new cars, and a vehicle tax based on the cost and weight of the vehicle, and on the type of fuel used. However, a new wireless device which is the brainchild of Dutch entrepreneur and venture capitalist Roel Pieper looks set to change all that.

The device, known as MobiMiles, will use global satellite positioning and other wireless technologies to charge drivers on a pay-as-you-go basis. Initially, according to Mr Pieper, car owners will be charged a flat rate per kilometer, but when the scheme is fully underway, fees may depend on road categories, and the time of day.

The Dutch Government is enthusiastic about the idea of modernising the road tax collection system, and has released figures which call for a projected 10 million cars, trucks, and motorcycles to be fitted with the tracking devices by 2006.

Although similar schemes are under development in countries such as Germany and Switzerland, Holland is the first country to approve the system for all vehicle categories.

However, despite the fact that the wireless devices will only register the category of road being used by individual drivers, civil liberty and data protection groups have expressed concern that implementing such a system may represent the thin end of the wedge in terms of privacy infringement.

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