Wed, Apr 11, 2012 - Page 2 News List

Sean Chen voices support for planned fuel tax reform

By Chris Wang and Shelley Shan  /  Staff reporters

Minister of Transportation and Communications Mao Chih-kuo, right, listens as Premier Sean Chen answers lawmakers’ questions about vehicle and fuel taxes at the legislature in Taipei yesterday.

Photo: Liu Hsin-de, Taipei Times

Premier Sean Chen (陳冲) told the legislature yesterday that he supported a planned reform of fuel charges that would calculate the tax based on fuel consumption rather than per vehicle.

Speaking at a plenary session in response to a question from Democratic Progressive Party (DPP) Legislator Yeh Yi-jin (葉宜津), Chen said he supported the move to a consumption-based fuel charge because it would make taxation more fair.

According to the Highway Act (公路法), fuel charges are collected to help pay for the maintenance, construction and management of highways, Chen said, adding that “it’s reasonable for people who use the highways more often to pay more in tax.”

Currently, vehicle owners pay a uniform tax.

Minister of Transportation and Communications (MOTC) Mao Chih-kuo (毛治國) said he hoped the reform would be implemented along with the planned “energy tax.”

If this is not possible, his ministry would amend the relevant legislation and propose measures to launch a fuel consumption-based tax system by itself, Mao said.

Several lawmakers across party lines have proposed similar bills to support the reform.

The DPP caucus on Monday said that the government should stop charging fuel taxes, adding that if the tax is to stay in place, it should be levied on the basis of fuel consumption and be reviewed along with energy and carbon taxes.

Chen Yen-po (陳彥伯), director-general of the Department of Railways and Highways, said the MOTC generally agreed with the proposed policy change.

Chen said the consumption-based fuel charge scheme was very different from the current system.

Currently, the fuel charge is levied based on the type of car a person owns.

Chen said the current system is easier and more convenient. However, the more frequent drivers and less frequent drivers essentially pay the same amount of fuel charge, which is unfair. The consumption-based fuel charge is fairer as motorists are charged upon their purchase of the fuel, but it involves complicated calculation of the fuel charge rate.

However, he said the government still needed to resolve several issues before it could enact the new policy.

First would be to determine if the fuel charge should be included as part of the energy tax, or if the two should remain separate, he said.

“We will discuss this matter with the Ministry of Finance [MOF],” he said. “If the MOF can implement the energy tax as scheduled, then the fuel charge can be levied with the energy tax. If the energy tax is not to be executed any time soon, then we [the MOTC] will have to enact the policy to impose the consumption-based fuel charge on our own.”

The MOTC would have to determine whether it would be able to collect the same amount of revenue under the new policy to fund its projects. Currently, the ministry collects about NT$45 billion (US$1.52 billion) in fuel charges annually.

The ministry also has to ensure that the new policy does not affect the government’s plan to subsidize public transportation, Chen Yen-po said.

The government must also ensure that it can collect the fuel charge from fishermen and farmers, who are currently are exempt from the fee, he said.

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