Government cancels VAT reduction for bicycles because of ‘too expensive’

The VAT on bicycles and electric bicycles will not be reduced to 6 percent after all. The government finds the measure too expensive. Last month, excise duties on diesel and petrol were significantly reduced.

In order to encourage more people to opt for the bicycle as a means of transport, the Chamber approved in 2019 unanimously a proposal from the PS good to lower the VAT on bicycles and electric bicycles, from 21 to 6 percent. Before it could be introduced, the measure only needed approval from the European Commission.

That approval has now been granted, but the government has now decided to retrace its steps and cancel the promised VAT reduction.

“Given the budgetary context, the government has decided, as part of a global review of budgetary priorities, to abolish the preferential tariff of 6 percent for bicycles, electric bicycles and speed pedelecs,” he said. Belgian from the Royal Decree published on Wednesday.

‘Painful in several ways’

Last month, the federal government did decide to increase the excise duties on diesel and petrol to the absolute minimum that Europe allows† This measure costs the treasury roughly 5.5 million euros per day.

“The fact that the government is breaking this promise is painful in several ways at the same time,” said Wies Callens, spokesperson for the Fietsersbond. ‘We understand that choices have to be made, but those choices must provide an answer to the problems we face. Of the most recent climate report in mind, the government would have done well to promote a climate-neutral mode of transport. A VAT reduction from 21 to 6 percent would also mean that bicycles are no longer luxury products. It’s just a symbol, but a symbol that can count.’

The government still wants to use the reserved budget – 80 million euros per year – for a so-called ‘alternative mobility policy to promote the bicycle’. This would mainly concern an improvement of the bicycle allowance for commuting. Callens: ‘That’s not bad, of course, but why couldn’t it be a both-and story? Unfortunately, a budget that only goes to commuting to work is of no use to cycling children or students.’

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