Unconventional charging and taxation to support public transport and taxation dis-incentives in commuter transport

Document Type

Conference Paper

Publication Date


Subject Area

place - europe


Recent European Commission communications have highlighted the need to change the current structure of transport pdcing in the European Union with the broad objectives of removing pricing distortions such that users pay a fair price for infrastructure use, taking into account both infrastructure costs and extemal costs. Pricing distortions occur in both private and public transport and concerns have been expressed regarding the generally 'blunt' nature of the public transport subsidies and the lack of clear targeting towards sustainable transport policiesl Conventional economic instruments, namely operator fare revenues and public subsidies are limited in their ability to send the correct pricing signals to users and, further, tend not to provide sufficient funds to enable enhancements to public transport systems. Consequently, the European Commission is investigating the potential for unconventional forms of charging and taxation to support public transport operations and investments. In addition to raising revenue a key objective of fiscal policy is to bring about a shift in user behaviour that supports the goals of efficiency in transport, equity and sustainability. In this context, the existing transport taxation systems of EU Member States, in particular, the taxation of personal income, fringe benefits and company taxation contain a mixture of contradictory signals that provide both incentives and disincentives for the use of sustainable modes of travel for commuter and business transport. There is, therefore, a need to consider the inter-relationships between general and unconventional taxation systems and how the two types of instruments might be most efficiently employed to support sustainable mobility objectives.


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