Green taxes in the Netherlands, 1985-2002

Green taxes

Green taxes as a proportion of total tax revenue rose from about 9% to more than 13% in the period 1992-1996. In the years after 1996, this share remained more or less constant at approximately 13-14%, with a mild drop after 1999.
In 2001 and 2002, the estimated revenue from national green taxes was EUR 14 billion. This corresponds to 13% of total national tax revenue. The revenue in real terms (after correction for inflation) from all green taxes fell slightly between 1999 and 2002. This can in part be accounted for by price movements but changes in fiscal policy (including tax cuts) and changes in the activities taxed have also played a role.

Making the tax system greener

One of the objectives of the 2001 Tax Reform was to make the tax system greener in order to encourage sustainable economic development. The National Environmental Policy Plan 4 (VROM, 2001) also states that, in the years to come, 'the environment' will have to be included in the prices of goods and services in order to solve the major environmental problems. One way of doing this is to make the tax system greener. This means shifting taxation to activities that have a negative effect on the environment. The introduction of environmental taxes means that the cost to the community of keeping the environment clean is made more manifest in prices. Increasing the price that has to be paid for activities that pollute the environment will induce changes in behaviour so that there will be a reduction in the harm inflicted upon the environment.

What are green taxes?

'Green taxes' do not consist only of those taxes introduced with the primary aim of contributing to the achievement of environmental objectives. The concept also includes other taxes that influence activities with an environmental impact. The revenue from these taxes goes into the coffers of central government.
Green taxes include environmental taxes (taxes on groundwater, tap water, waste materials, fuels and the regulatory energy tax), excise duty on petroleum oils and taxes on vehicles (goods vehicle tax, tax on private cars and motorcycles and tax on heavy goods vehicles).
The revenue from green taxes can be used to generate positive stimuli for environmentally acceptable behaviour (for example, subsidies and fiscal arrangements), but also for general tax reductions for households and companies, such as cuts in income tax.

References

Bruggen. C. van (2000). Milieuheffingen en -belastingen 1986-2000. Kwartaalbericht Milieustatistieken 2000/3. Statistics Netherlands, Voorburg/Heerlen.
Financiën (1997). Belastingen in de 21e eeuw; een verkenning. Ministry of Finance, Memorandum to the Lower House No. 25810 nr. 2, The Hague.
Financiën (1999). Miljoenennota 2000. Ministry of Finance, The Hague.
VROM (2001). National Environmental Policy Plan 4. Working on sustainability: Where there's a will there's a world. Ministry of Housing, Spatial Planning and the Environment, The Hague.

Relevant sections and indicators in the Environmental Data Compendium

Relevant information outside of the Environmental Data Compendium

More information about environmental taxes can be found on Statline (Statistics Netherlands).