Belgium looks to steer away from company cars

Workers in Belgium will soon be offered an incentive to ditch gas-guzzling company cars in an effort to cut congestion and improve health, the government said Friday.

Under a new law, employees who have had a company car for three years will be granted an annual “mobility budget” which they can use to trade in their vehicle for an electric car or to fund public transport options.

Belgium has an air pollution problem owing to the concentration of diesel vehicles heading into big cities on a daily basis. Some 1.4 million dirty diesel vehicles are on the road in Belgium — around four times the volume in other similarly populated EU countries such as Portugal and the Czech Republic.

The availability of free parking for employees and company car tax incentives in Brussels and other cities has kept the flow of traffic high, raising the concentration of harmful pollutants such as nitrogen oxide and particulate matter as well as causing serious congestion.

“We want to encourage employees to switch to a more environmentally friendly model in combination with an alternative means of transport such as public transport or bicycle,” Belgiums Minister of Social Affairs and Public Health Maggie De Block said in a statement.

The European Commission has an ongoing infringement case against Belgium for its poor air quality. Pollution can contribute to heart disease, stroke, lung disease or respiratory problems in children, according to the World Health Organization.

The new incentive will correspond to the cost of the employees company vehicle and can be used to pay for a mass transit subscription, taxi costs, a bicycle, shared car services or a bus chartered by their workplace. It can even be redeemed against housing costs if the worker moves closer to his or her job and ditches their company vehicle.

Any remaining balance will be paid out in cash — minus social security.

“The employer will not pay a cent more and the worker will not receive a cent less,” De Block said. “Thanks to this formula we expand the choice.”

The Belgian government has already made an effort to curb the use of company cars, which are cheaper for employers to offer than straight-up payrises owing to tax incentives. An existing cash-for-car scheme that allows workers to trade in their company car for a low-tax cash alternative, worth up to €700 per month, will be retained, De Block said.

Carmen Paun contributed reporting.

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