THE HAGUE, 26/08/00 - Owners of economical cars are to pay less tax. The Cabinet reserved 35 million guilders on Friday for reducing road tax on environmentally-friendly cars.

Which cars this will apply to will be announced during the budget presentation on Princes Day. Civil servants from the Environmental Ministry will work out the plans in more detail.

The Labour (PvdA) and conservative (VVD) MPs, who together form a Lower House majority, asked for this lower tax on 'clean' cars in May. Finance Minister Gerrit Zalm promised to look into the possibilities.

Several parliamentary parties also wanted to make road tax cheaper in compensation for the steep increases in petrol and diesel prices. Calculations in May showed that the tax would have to be reduced by a total of between 1 and 1.5 billion guilders. Minister Zalm stated immediately that he did not back a reduction of this magnitude.

In fact, the view of Environment Minister Jan Pronk is that running a car should become substantially more expensive. Drivers would then be more economical with fuel, he claims. Pronk is in favor of linking road tax to fuel consumption.