What the New Vehicle Tax Will Mean
Translated from Russian with the help of AI. Original: Russian version
A vehicle tax built into the fuel excise is a more sensible option than higher taxes on older cars, which would hit poorer households hardest. A differentiated rate, heavier on gasoline and minimal on diesel, would spare carriers and encourage a shift to gas.
I recently read that two options for taxing vehicles are currently under consideration. The first is to build the tax into the excise duty. The second is to refine the existing tax system and raise taxes on older cars, on the pretext of protecting the environment.
I believe taxes on older cars make sense if, and only if, we have joined the ranks of the thirty most developed countries. Until then, forcing poor people to pay extra for an aging car bought some 10 years ago is inhumane and wrong.
Building the tax into the excise is, I think, the most sensible option, because:
1) The tax burden would be distributed fairly: the more you drive, the more you pay.
2) It would encourage people to use public transport more, or to switch to more environmentally friendly fuels such as gas, and to electric cars.
3) It would encourage people to buy cars with lower fuel consumption.
4) Tax collection would be simpler, because there would no longer be any need to monitor thousands of vehicles.
5) The number of tax administration staff could be reduced.
The main problem is that carriers would suffer if fuel prices rose. In this respect, I think it is best to introduce a differentiated vehicle tax, with a heavier burden on gasoline and a minimal one on diesel. It is diesel that is used for freight and production. Strange as it may seem, diesel is also more environmentally friendly. Large carriers would not be hurt, and small ones would get an additional incentive to switch to gas.
As for supporting the domestic car industry by increasing the tax burden on the poor, that is complete nonsense. The people who would suffer are those who can barely afford a car from AvtoVAZ. Korean cars would clearly be out of reach. And for many rural residents, an old 1995 Volkswagen is the only means of survival: taking milk to the city in the morning, driving a cab in the evening, and taking a lamb to the market on weekends.
A tax on older cars would drive their value down to almost nothing and turn them into dead weight. Nobody would scrap them, and tax collection would remain low.
I hope our deputies at the "Beijing Palace," with their liter of whisky, will not forget about ordinary people.
Published in: Ratel.kz, 16 April 2016