Road taxes under review BYMOT

Fuel taxes and road user charges could be abolished and drivers tracked by GPS if one of the options from a review of road taxes is adopted by the Government.

The Ministry of Transport has been quietly conducting a ‘‘future of the revenue system’’ work programme, for most of the Government’s last term.

Essentially, it is a high-level review of whether it is appropriate for the Government to rely on fuel taxes in an era when it is also trying to get people to use less fuel, and as revenue from fuel taxes declines as electric cars become more common, and public transport more widely used.

The Government currently collects about $4 billion a year from fuel taxes and road user charges. The revenue is used to build and maintain roads, and other transport projects.

Currently, electric vehicles are exempt from road-user charges, and do not pay fuel tax. If that exemption were ended – which the Government needs to make a decision on by the end of the year – it would need to look at new ways to pay for roads, Transport Minister Michael Wood said.

‘‘[I]f it were not extended there would be a need to integrate EVS into paying RUC [road user charges]. I’m currently considering whether to extend that exemption – an announcement will be made in the future,’’ Wood said.

‘‘We do recognise that when EVS are integrated into the RUC system, therewill be a need to ensure they are fairly treated. For plug-in hybrids in particular, we want to ensure there isn’t a situation where they are double charged for petrol excise duty and road user charges,’’ Wood said.

A gradual phase-out of taxes on fuel would be the biggest shake-up of funding for transport in nearly a century – the first taxes on fuel were introduced in 1927’s Motor Spirits Taxation Act.