Broad tax reform provides an opportunity to clearly distinguish between taxes (which are raised for general revenue) and charges (which are a fee for road provision and use). This paper takes no account of the Government's and Opposition's August 1998 proposals for tax reform. Rather, it sets out some reforms to motoring taxation which have long term merit. This paper argues that there should be a direct customer-provider relationship between road users on the one hand, and corporatised road entities on the other. This would bring roads into line with other infrastructure providers such as telecommunications, airports, railways, electricity and gas. The taxation for general revenue purposes of motoring costs such as petrol and vehicle purchase should be at a comparable rate as other goods and services. Road infrastructure should be funded through fixed and variable motoring charges. Road users should ideally also meet their addition to the cost of congestion, accidents, noise and air pollution, the latter three of which can be levied through a variable (fuel-based) charge. It is inefficient and inequitable to raise congestion charges through a fuel levy, although there are suitable direct alternatives. (A)
Samenvatting