Junior finance minister Eric Wiebes told parliament on Monday he sees little alternative to his controversial plans to increase the tax on company cars, despite mounting opposition.

Last week Wiebes announced plans to put more cars into the top tax category, meaning more company car drivers will have to pay tax based on the catalogue value of their cars.

The aim is to encourage more people to drive electric vehicles, which is part of the government’s plan to boost energy efficiency and cut pollution.

Alternative

In particular, MPs from Wiebe’s own party, the right-wing Liberal VVD, have criticised the proposals. MP Helma Nepperus said the plan had come ‘out of the blue’ and called on the minister to come up with an alternative.

However, Labour MP Ed Groot, also has his doubts about the plan, news agency ANP said on Monday.

The company car drivers association estimates the changes will cost its members up to €167 extra a month.

Wiebes is introducing road tax for electric cars, which had been exempt. Electric company car drivers will have to pay tax on 7% of the catalogue value of the cars rather than 4% and hybrid cars will go up to 14%.

The Volkskrant reported in March that tax breaks on hybrid and fully electric cars cost the Dutch treasury €500m last year. Last year, 22,000 hybrids and electric cars were sold in the Netherlands, many more than before the tax breaks were introduced.

Lease car drivers can avoid paying tax for their company car – up to 20% of the catalogue value – if they drive fewer than 500 km a year privately. Drivers have to keep a logbook of their car usage.