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Abstract:
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"Road User Taxation (RUT) is a surprisingly underutilized source of public financing in less developed countries. The base of the tax (the number and value of motor vehicles and motor fuel consumption) is growing, the general view is that road users have an ability to pay more taxes, a charge to the users of roads based on gasoline
consumption or vehicle weight is generally seen as fair, higher transport taxes can reduce congestion and pollution, and at least motor fuel taxes are easily administered. Despite meeting all of these maxims for a good tax, RUTs are a mainstay of the tax system in few developing countries. These are many reasons: political opposition, the fear that increased transport taxes would cripple economic development, assessment
and collection difficulties with the non-fuel components of RUTs, and problems with the rate and base structure of transport taxes. This paper is principally about the latter two constraints to taxing motor vehicles and road use, and about the policy and administration options open to move taxes in this sector toward a full realization of their
revenue potential."
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