Bulgaria has 2.4 million motor vehicles and a significant in transit traffic of foreign vehicles but only 36,500 kilometers (kms) of roads, characteristics which lead to heavy road wear, particularly on the principal highways. In studying road user charges, only those duties and taxes specifically related to motor vehicle use were considered. Three of these (the fuel excise tax, the road fuel levy and the vehicle road tax) make up over 93 percent of the annual total from such taxes. However, only about 30 percent of such revenues (some US$134 million) was actually spent on roads in 1995. This is only around 14 percent of the estimated requirement (US$943 million). However, it appears that this diversion of road specific funds in unavoidable, and that road funds will not be available from other sources, until Bulgaria can expand its tax base. Consequently, road maintenance will have to be financed from road user charges. After a study of tax structures and levels, it was therefore recommended that increases in the road fuel levy, the vehicle road tax, vehicle-related penalties, parking charges, transit charges on foreign vehicles and drivers' licenses be phased in over time. Required legal and institutional changes were also recommended. Finally, the consequences of failing to deal with current Bulgarian road maintenance problems were pointed out. This paper is based upon a study of road user charges which was made for the Ministry of Bulgaria and summarized in a final report dated February 29, 1996.'The scope of the study included consideration of recent Bulgarian (and European) road user charge experience, current and future road expenditures, possible funding sources, policy options on road user charge structures and levels, institutional requirements of the program, periodic review of user charges and amendments to present legislation, plus an implementation schedule. (A)
Abstract