The Dutch government is set to be the first in Europe to replace annual road tax with a pay per mile system for motorists.
The polluter pays approach to motoring taxation could help provide an incentive to drivers to cover fewer miles while ensuring a fairer reflection on car use.
Proposals set before the Netherland’s cabinet on Friday would see a charge of 3 cents for every kilometre travelled introduced. The tax would be dependant on the installation of a GPS monitoring system and could prove a test case for other European countries to follow suit.
The Dutch Ministry of Transport expects that the charge, to be introduced in 2012, will halve the number of traffic jams as well as reduce greenhouse gas emissions.
Road tax and purchase tax on cars will be abolished, leading to a reduction in the cost of purchasing a new car by around 25 per cent. In a statement to the press, the Ministry said it expects that the new system of taxation will ‘not exceed the combined proceeds from the ‘old’ taxes’ meaning that motorists will not be hard hit by the changing system and will actually benefit from the cheaper retail cost of cars and clearer roads.
The Ministry also stated that it expects the number of kilometres travelled to be reduced by approximately 15 per cent while CO2 and fine particle emissions could fall by more than 10 per cent as a result of taxing car use rather than car ownership.
The cost per kilometre will depend on the size of the vehicle, initially cars will pay 3 cents, while trucks and vans will pay slightly more. Each year the base tariff will rise until 2018.
