Taxing vehicles, fuels, and road use: Opportunities for improving transport tax practice

Kurt van Dender

No 44, OECD Taxation Working Papers from OECD Publishing

Abstract: This paper discusses the main external costs related to road transport and the design of taxes to manage them. It provides an overview of evolving tax practice in the European Union and the United States and identifies opportunities for better alignment of transport taxes with external costs. There is considerable scope for improving transport tax practice, notably by increasing the use of taxes based on road use. Distance charges offer great promise in delivering more efficient road transport. In heavily congested areas, targeted charges are a cost-effective way of reducing congestion. Fiscal objectives provide an impetus for change as improving vehicle fuel efficiency and fleet penetration of alternative fuel vehicles erode traditional tax bases, particularly those relating to fossil fuel use. A gradual shift from an energy-based approach towards distance-based transport taxes has the potential to establish a stable tax base in the road transport sector in the long run.

Keywords: congestion; congestion charging; distance-charges; external costs; fuel taxes; pollution; road transport (search for similar items in EconPapers)
JEL-codes: H23 Q58 R4 R41 R48 (search for similar items in EconPapers)
Date: 2019-06-05
New Economics Papers: this item is included in nep-acc, nep-ene, nep-env, nep-pbe, nep-pub, nep-reg, nep-tre and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://doi.org/10.1787/e7f1d771-en (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oec:ctpaaa:44-en

Access Statistics for this paper

More papers in OECD Taxation Working Papers from OECD Publishing Contact information at EDIRC.
Bibliographic data for series maintained by ().