Tax, road tax, British roads, EU, DriveWrite Automotive

European Motorists Deserve A Better Tax Deal

It will come as no surprise to any British motorist that UK drivers top the tax to road expenditure ratio. UK drivers pay almost four times as much in motoring taxes as is spent on roads according to Edmund King, the AA president, speaking in Brussels yesterday. This is the highest ratio in Europe (with the exception of Malta).

These results are contained in a study commissioned by the Federation Internationale de L’Automobile and show that there is a €107.9 billion surplus revenue in the EU in road transport taxes.

286.3 billion was collected in road transport taxes and charges in the EU excluding Cyprus in 2013. In that same year, governments only re-invested €178.4 billion into the road network.

Passenger car drivers alone, contributed 71% of this amount, with a total €205.8 billion. While the revenue from road transport amounted to 2 – 3% of national Gross Domestic Product (GDP), the expenditure of governments averaged only 0.8% of GDP. For the UK the cost coverage ratio (2013 figures) for passenger cars was 387% i.e. drivers are paying almost four times in tax compared to what is spent on roads.

The only country with a higher ratio is Malta (558%). Luxembourg (378%) and Bulgaria (368%) come close.

Countries with which we might normally expect to be compared have a considerably lower ratio:

Belgium (246%)

Germany (209%)

France (186%)

Ireland (287%)

Netherlands (230%)

Sweden (250%)

In addition to covering the costs that road networks require, road taxes and charges are reinvested in society at large and could also be used to tackle the social costs of road transport. As the European Commission considers enabling additional charges to fund infrastructure and manage road use, FIA Region I calls for a re-examination of the revenue that is already generated before road users are burdened with new or increased charges on their daily mobility.

Edmund King said: “This report clearly shows that European drivers are paying their way. UK drivers more than pay their way with almost the highest tax to road expenditure ratios in Europe. Our message to the European Commissioner for Transport and perhaps more importantly, the UK Chancellor, is that UK drivers want a better deal without further taxation.”

Thierry Willemarck, FIA Region I President, said: “European motorists make a significant contribution to public budgets, far beyond the revenue needed to cover the costs of the road network. This should be acknowledged and their investment used to ensure a safe road network that sufficiently supports the needs of daily commuters.”

Wim van de Camp, MEP, said: “The quality of our road infrastructure affects safety, comfort and sustainability. If we want a user-pays system, what a user pays needs to be reinvested wholly into what is used.”

The results of the study were launched today in Brussels at an event hosted by Wim van de Camp with policymakers, journalists and stakeholders present. At the launch event, Violeta Bulc, European Commissioner for Transport and Jean Todt, FIA President will speak about the contribution that is being made by motorists and the possibilities for reinvestment of this revenue by governments into Europe’s roads. Edmund King talked about the UK having one of the highest tax to expenditure ratios and therefore advised against the introduction of further taxes via road pricing.

EU Governments generated a surplus of €107.9 billion on road transport taxes in 2013. Road transport generated €286.3 billion in national taxes and charges, governments only re-invested a €178.4 billion into the road network.

Consider next year’s new VED rates? Will they listen to Edmund King? What do you think?