UK's expensive CO2-based tax system re-examined
Currently, the UK has one of the most expensive car taxation systems in the world. Besides VAT (sales tax) at time of purchase, drivers in Britain must pay fuel taxes and a road tax (Vehicle Excise Duty) a corporate tax (for fleets), and sometimes a Congestion Charge, as in London. Manchester is about to vote on a congestion tax as well.
Many of these taxes are based on a vehicle's CO2 emissions and are applied to cars in the same way. This means that a person who only uses a car on the weekends pays the same amount as a commuter. So the questions is: what about a "pay-as-you-go" road tax scheme that would be nationwide and more progressive? A pay-for-the-miles-you-drive tax is what TheGreenCarWebsite found that 53.5 of its visitors were in favor of in an online poll. 46.5 percent of visitors were against the idea. One reason for the disapproval was concern about invasion in motorists' private lives, since the actual mileage of a car would need to be registered to calculate the amount of the tax.
[Source: TheGreenCarWebsite]
Reader Comments (Page 1 of 1)
Dave 7:44PM (12/10/2008)
Why wouldn't you just tax fuel based on the carbon content of it instead?
This way your tax is based on the actual carbon emissions, instead of an estimate based on the number of miles driven and the fuel economy of the car.
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Scatter 4:40AM (12/11/2008)
Not an overwhelming margin in favour really, especially as it's likely to be .
Dave, unless you set the fuel tax very high, a simple tax like that is unlikely to send much of a signal to guide car purchasing in a low carbon direction.
I favour France's bonus/malus system which appears to have been a massive success (even too successful).
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Xander 6:22AM (12/11/2008)
I think this has more to do with protecting the UK government's tax revenues. If electric cars gradually take over then the government loses out on the huge tax on fuel. They can see that possibility so they want to find a different way to keep charging motorists.
I live in the UK and currently drive a Smart ForTwo. I would seriously consider the EV version when it becomes available and re-charging it will be much cheaper than fuel costs, even though my current Smart has good fuel consumption.
The situation is different in Europe than the US because of the heavy tax on fuel. This has encouraged people to have smaller, more efficient cars so it has been an 'environmental' tax of sorts. Just think how much longer the world's oil supply would have lasted if the US had a history of similar fuel taxation.
The UK government has also looked at introducing tracking boxes in every car to monitor it's movements and charge for road usage based on route and time of day. Personally, the idea sounds very George Orwell 'big brother' to me.
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Debra 6:39AM (12/11/2008)
There's a scheme like this being introduced in the Netherlands and from what I can make out, the Dutch are in favour of it because it's a fairer system.
I imagine British people would be concerned not only about privacy, but that it would be an additional tax, rather than in the Dutch proposal, where road tax and vehicle purchase tax will be phased out as the kilometre levy takes effect.
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matreze 7:15AM (12/11/2008)
you say that the UK has one of the most expensive taxation systems in the world?
try Ireland. here if you want any decent car you end up having to pay up to 50% extra in vehicle registration tax. (actual % depends on CO2 emitted)
then 22% Vat and taxes on fuel etc and it becomes very expensive.
just my 2 cents
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Phil 8:44AM (12/11/2008)
Dave:
70% of the pump price is already tax in the UK.
Even with much lower oil prices, we are still paying $5 per gallon for gas.
Fuel tax is perfect because it taxes inefficient cars and miles driven. An older car that is less efficient doesn't do much harm if it stays in the garage.
The problem is that the UK government has already maxed out the fuel tax and annual road tax, now they need to invent a new tax!
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JDred 12:36PM (12/11/2008)
Thank God I live in the US! No offense, but you Europeans can keep these tax schemes! If CO2 is considered pollution, how soon before you get taxed for simply breathing air?
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stanley 2:56AM (12/12/2008)
How about singapore?
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