Environmental taxes

In 2016, the Dutch government collected 23.6 billion euros in environmental taxes and levies. This was 8.7 percent of total government tax revenues including social contributions. In 2009, the share was still 10.0 percent. With a share of almost two-thirds, Dutch households bear the heaviest burden. The share of environmental taxes and levies has decreased since 2010.

The issue

Environmental taxes and levies can be used as a policy instrument to change production and consumer patterns. An environmental tax is a tax on goods or activities which have proven any specific negative impact on the environment. Environmental taxes flow in the general budget and are often coupled to possession and use of cars and energy consumption. Energy tax and motor vehicle tax are examples of environmental taxes. Revenues of levies are used to cover the cost associated with particular environmental activity, like sewerage charges and waste water levies.

Analysis

The Dutch government collected 20.7 billion euros in environmental taxes and 2.8 billion euros in levies in 2016. This is an increase of more than 3 percent compared to 2015. Although revenues from environmental taxes and levies have seen an increase over the past few years, total tax revenues have risen more steeply, resulting in a lower share of environmental taxes. Therefore, there is no further 'greening' of the tax system.

Excise duties on petrol and other mineral oils, motor vehicle tax and energy tax accounted for 8.1 billion euros, 5.6 billion euros and 5.0 billion euros respectively in 2016. Revenues from energy tax increased the most compared to one year previously, namely by 10.7 percent, partly due to tariff increases on the consumption of natural gas. In 2013, a new surcharge on storage of sustainable energy (ODE) was introduced, which was used to finance renewable energy subsidies.

Revenues from the tax on newly purchased passenger cars and motorcycles (bpm) rose to 1.6 billion euros; 6.1 percent more than in 2015. Households paid 28 percent more bpm. Raised tariffs account partly for this increase. For the bpm, the CO₂ emission limits for petrol and diesel cars were tightened and tariffs for the three highest categories of CO₂ emissions were increased in 2016.
Revenues from coal tax decreased from 195 million euros (2015) to 3 million euros (2016). Coal that is used in coal-fired plants for the generation of electricity has been exempt from coal tax from 2016 onwards.

International comparison

Compared to other European countries, environmental taxes are relatively high in the Netherlands. Of the 24 OECD countries, the Netherlands ranks 4th place with 8.7 percent (2016). The share is highest in Slovenia at 10.6 percent, while Iceland ranks lowest, 3.2 percent. In neighbouring countries Belgium, Germany and the United Kingdom, the environmental pressure is considerably lower than in the Netherlands. The average share of environmental taxes and taxes of the 28 countries of the European Union is 6.3 percent.