More than one hundred municipalities tax utilities companies with sufferance taxes on underground pipelines. The utilities companies pass these charges on to their clients. This invisible tax can run up to as much as €86 per household per year. This is the conclusion of a study conducted by Corine Hoeben of the University of Groningen Centre of Research on Lower Government Economics (COELO). She is publishing her findings today in the journal ESB.
Municipalities are entitled to levy a sufferance tax on the use of common land. Currently this tax also covers underground pipelines. Most pipelines are owned by utility companies: water companies and energy networks operators. The sufferance tax raises these companies’ expenses, which are ultimately passed on to their clients (households). As a result, households end up unwittingly paying municipal taxes.
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