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Home NATIONALKilometre-based taxation in offing
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Tue, 17 Dec, 2013 03:41:19 AM
FTimes Report, December 17

A working group of the Ministry of Transport and Communications has recommended for the introduction of kilometre-based taxation of car use in Finland, said an official press release on Monday.

Jorma Ollila, chair of the working group, submitted on Monday the group report to Transport Minister Merja Kyllönen.

"Before reaching a final decision on shifting to kilometre-based taxation, it should be fully ensured that the technology to be used is efficient and applicable to taxation purposes", said Ollila.

At the first stage, a wide range of tests would be carried out to pilot the technological systems, monitoring, privacy protection and information security. The Ministry of Transport and Communications has launched an experimental project on electronic transport services for 2014-2015, which could be used to test kilometre-based taxation as well.

Transport Policy Group chairman Jorma Ollila hand over a group study to Transport minister Merja Kyllönen on Monday. Photo – Lehtikuva.
The working group said a kilometre-based tax would be an efficient tool of financial steering that could be used to influence traffic behaviour.

"Continuous growth in road transport, tightening environmental goals and general government finances call for more efficient measures in transport policy", Ollila added.

The kilometre-based tax, together with the fuel tax, would be a better means to achieve the transport and environmental policy goals than the current taxation model. A taxation system based exclusively on the use of car would decrease car traffic volumes and thus emissions and accidents, while also increasing the use of public transport services.

In addition to the kilometre tax, a fuel tax would be levied. The kilometre tax would be based on the CO2 emissions and on the region where the car was used.

Taxation based on the use would mean that the costs would decrease for those who drive less than the average, while increasing for those who drive more than the average.

The investment costs, as well as the annual running costs, of the kilometre-based taxation system would be around 130 million euros.

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