The Dutch government is exploring a new way to cut CO2 emissions by introducing the proposed Kilometer Cost Act (Kilometerprijswet) in 2012. The aim of the proposed Act is to require vehicle owners to pay a ‘kilometer levy’ (kilometerheffing) for every kilometer travelled by each individual vehicle. By imposing this tax, the Dutch government hopes that more people will use public transport, cutting road congestion and CO2 emissions.
The kilometer levy would work as follows. All vehicle owners would need to register with the authorities. This would include drivers of foreign-registered vehicles who wish to drive in the Netherlands. Taxis, public transport buses, pre-1987 classic cars, police cars, ambulances and motorcycles would not have to pay the kilometer levy.
In each Dutch vehicle a GPS would be installed to record the kilometers driven. The vehicle owner would then receive a tax invoice based on the kilometers driven. To protect the privacy of the vehicle owner, the vehicle owner can choose that the GPS-system does not send information to the tax office regarding the specific route.
A different system would apply for foreign-registered vehicles. Foreign truck owners will be able to choose to pay a fixed tax or a tax based upon the kilometers driven in the Netherlands. The system for other foreign vehicles is still being developed.
The tax will be charged on two levels: a basic rate and a peak hour rate. The exact tax amount will depend on the weight of the vehicle and the volume of CO2 emissions. For heavy goods vehicles, the tax will also depend on the Euro classification of the truck (as laid down in Directive 1999/62/EC). The higher the level of polluting emissions, the higher the tax. The tax revenue would go into an infrastructure fund to be used for the construction of roads, rails, etc.
The proposed Kilometer Cost Act is expected to enter into force in 2012. The kilometer levy will apply first to heavy goods vehicles and then be gradually phased in for other vehicles until 2018. The Netherlands will be the first country in the world where the kilometer levy tax system applies.