Belgian Road Tax: will the transport sector draw the short straw?

The kilometre-based charging system that will be implemented in Belgium

on April 1st, 2016 remains a topic of debate. Countless transport contracts
are currently being revised, revealing high levels of uncertainty on both
sides of the negotiating table. Since no legal basis is provided for passing
on the kilometre tax to customers, both transport companies and their
costumers fear that they will end up footing the bill.

The government’s so-called “accompanying measures”, such as the end of

the Euro vignette, the partial abolishment of road taxes and the fiscal
deductibility of the kilometre tax via the corporation tax and personal
income tax are all intended to soften the blow. But various transport
associations have pointed out that these measures fall short since they fail
to fully compensate for the extra costs. Even after the compensatory
measures have been factored in, the Belgian road transport sector is left
facing a bill of €141 million.

Feeling this increased pressure imposed on their profit margins,

transporters have started renegotiating their prices with customers, a
difficult process that raises questions on the true cost impact of this new
tax system.

Data as a basis for negotiation

There is no doubt that a clear view on the impact of the kilometre-based

charging system is an essential basis for effective negotiations. Although
the Belgian Institute for Road Transport and Logistics (ITLB) has estimated
the average cost increase caused by the kilometre tax, a common feeling
exists that anyone who trusts in averages will undoubtedly end up
disenchanted. The kilometer tax highly depends on multiple factors,
causing strong fluctuations, even within a limited set of routes. A more
profound elaboration on this subject and examples can be foundhere.

Then how to calculate the cost increase? Tax simulators –tools that allow to
calculate the exact tax cost for a specific route and vehicle– might be the
answer, but haulage companies are afraid that these do not cover the entire
bill. Also Karl Debruyn from Transmet expresses his concerns: “Tax
simulators do not take into account empty kilometres, nor maintenance
visits or the extra costs for our breakdown service. Customers restrict tax
calculations to their tours, meaning that a substantial part of the tax cost
will be fully presented to the transport sector”. According toTruck &
Business, this misunderstanding can only be avoided if logistic parties offer
full transparency to their customers about total costs and profitability per
tour. This encounters calculating the true impact on total transport activities
and might start a meaningful dialogue between shippers and haulage
companies.

A different perspective on transport

Despite the extra burdens that are associated with the new kilometre tax,
shippers and transport companies can also seize this opportunity to
intensify their collaboration and work on saving costs and improving
efficiency together. Trucks running empty will be subject to even greater
financial penalties, and measures to increase the load factor will be
prioritized more than ever before. Possible approaches that can improve the
efficiency of road transport include the use of more efficient and more
powerful planning tools, consolidation of transport flows and the use of LHVs
with a maximum permissible weight of 60 ton. In that context, the
kilometre-based charging system may trigger more alignment and may
enable the entire industry to take its first steps towards fundamentally
smarter transport solutions.

TOPICS: Road Tax