United Kingdom: The future method of car tax payment may experience a transformation. The proposed pay-per-mile project(demonstration/PoC) could potentially replace the traditional Vehicle Excise Duty (VED), wherein motorists would be charged according to the distance they travel.
Under the ‘pay-per-mile car tax’ those who drive more, pay more tax, and vice versa. This is seen as a fairer system compared to the current one that taxes based on car characteristics (like engine size) which might not reflect actual road usage.
Vehicle Excise Duty (VED), also known as road tax, is an annual tax levied in the UK on most motorized vehicles driven on public roads. The amount you pay depends on your car’s CO2 emissions (for newer vehicles) or its engine size (for older ones).
This concept hinges on the installation of tracking devices in vehicles. Silviya Barrett, Director of Policy and Campaigns, speaking to Express.co.uk, explains the potential for this data: “Drivers can be charged more during peak times or in more congested areas.” This would create a dynamic tax system where high-mileage drivers and those contributing to congestion pay more, potentially making the system fairer.
However, the constant location tracking required raises privacy concerns. The data collected could be used not only for calculating taxes but also for implementing congestion charges in specific areas or during peak hours. This raises questions about how this data is secured and used, and whether it could be misused for purposes beyond car taxation.
A pay-per-mile system offers potential benefits in terms of fairness and potentially reducing congestion. Ensuring robust data privacy measures will be critical. Finding a balance between a fairer tax system and protecting individual privacy will be key to navigating this potential road ahead.
