close
Share with your friends

OECD: Declining tax revenue from transport fuel taxes

OECD: Declining tax revenue from transport fuel taxes

The Organisation for Economic Cooperation and Development today issued a report that examines the effects of declining tax revenue from diesel and gasoline used in private cars and whether distance-based charges would help sustain tax revenues as well as have other effects on the environment.

1000

Related content

The OECD report is based on studies of the situation in Slovenia (where 14.6% of total tax revenue collected in 2016 by the central government was from excise taxes and carbon taxes on road transport fuels). According to the OECD report, Tax Revenue Implications of Decarbonising Road Transport - Scenarios for Slovenia, because tax revenue from diesel and gasoline use in private cars is likely to decline substantially in the coming decades, a gradual shift from fuel taxes to distance-based charges could contribute to making tax policy more sustainable. In the OECD report:

  • An analysis considers how tax revenues from transport fuels could evolve over time as more fuel-efficient and alternative fuel vehicles penetrate the vehicle fleet.
  • The simulations show that a moderate kilometre charge on motorways that gradually increases from 0.7 Eurocent/km in 2020 to 4.6 Eurocent/km in 2050 could cover the potential decline of fuel tax revenues. A distance-based charging system would charge per-kilometre driven, instead of the all-you-can-drive access to the road network via a vignette, as currently applies to passenger cars in Slovenia.

According to the OECD, the analysis for Slovenia holds lessons for other countries—in particular those with high reliance on fuel taxes.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal