Published on 01 Jan 99
by Australian Tax Research Foundation
This paper deals with the Australian approach to taxing vehicle ownership. The paper poses three questions. Firstly, are motorists lightly or heavily taxed? Secondly, should they be heavily taxed? Thirdly, what is the appropriate balance between taxes on vehicle ownership and use? The paper
considers changes to existing tax design and also describes and assesses the merits of electronic road pricing. Both options might be used to increase the geographic differentiation of road use charges, and electronic road pricing could be used to introduced time of day variations. Existing taxes on vehicle ownership and used should be viewed first as charges then, if relevant, excess taxes. Much public policy debate on this area of tax in Australia has failed to recognise that, from an economic efficiency perspective theories a right level of the charge component.