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Friday, May 06, 2005
Pena: Tax, Traffic and Air Pollution
By Rox Peña
So how do you resolve three problems with one solution? The Swedish Government had one bright idea. They will start implementing a congestion tax system in their capital Stockholm for a six-month trial period beginning January 2003. The system is meant to alleviate vehicular traffic, curb air pollution and earn money on the side.
THE government is in dire need of funds. Tax measures like the “sin tax” and a higher value-added tax (VAT) rate are among the actions being taken to avert a possible fiscal crisis. Cost cutting measures like the four-day workweek have been implemented. The Bureau of Internal Revenue (BIR) is aggressively running after tax evaders, including actors, actresses and gambling lords, to increase its collection.
Last January, the Attrition Act of 2005 was passed. It aims to improve the revenue collection performance of the BIR and the Bureau of Customs (BOC) through the creation of rewards and incentives funds.
Traffic is a major headache for local officials. It slows down economic activity, wastes precious time and fuel, and contributes to pollution. Metropolitan Manila Development Authority (MMDA) Chairman Bayani Fernando has employed several schemes to decongest Metro Manila’s streets, some of them proving to be effective.
The “No Left Turn” scheme has so far unclogged choke points along Edsa like the Muñoz intersection and North Avenue area. Other cities like San Fernando are quick to follow Fernando’s example. But our narrow streets can’t simply cope with the increasing number of vehicles. Rush hour traffic turns major roads into big parking lots.
Air pollution from smoke belching vehicles is making our urban dwellings unsafe. The Clean Air Act, which requires mandatory smoke emission test for vehicles prior to registration, has not totally eliminated dirty air. But even with fewer smoke belchers, the sheer volume of vehicles is enough to create choking clouds of smoke.
So how do you resolve three problems with one solution? The Swedish Government had one bright idea. They will start implementing a congestion tax system in their capital Stockholm for a six-month trial period beginning January 2003. The system is meant to alleviate vehicular traffic, curb air pollution and earn money on the side. Drivers entering the city have to pay between 10 kronor (P77) to 20 kronor (P154) depending on the time of the day. By Philippine standards, that’s a huge amount.
To monitor vehicles entering the city, they plan to install devices that will read electronic tags on cars. Every time a car is registered, a signal will be sent to a central computer, which will then create a billing statement to the owner. I think this system is similar to the e-card of the North Luzon Expressway (Nlex).
Actually, this idea was first implemented by London in 2003. There are around 24 million cars in Britain, most of which goes to London. The average speed during the morning rush hour traffic is a mere 14 mph. To arrest the problem, London’s mayor introduced an ambitious traffic congestion charge. Motorists who want to enter a 13-square kilometer area in Central London between 7 a.m. and 6:30pm on weekdays will have to pay 5 pounds (P513) per day. That’s four times more expensive than Stockholm. There is even a fine for late payment, starting with 80 pounds (P8,208) to 120 pounds (P12,312). A network of 700 computer-linked cameras has been erected to photograph car plates. Bicycles, mopeds and motorcycles are all exempt.
With this scheme, the city mayor is expecting to cut traffic in Central London by 10 to 15 percent. What’s more, it is expected to raise additional revenue of 130 million pounds (P13.3 billion) a year for the city. That’s equivalent to 14.6 percent of the total budget of the Philippines for 2005.
Can our local officials implement such scheme? Actually, Angeles City came close to introducing this system when it implemented the ban outside city limit public utility vehicles during daytime. Adding a provision for a “toll fee” for those who still want to enter the city will create a system similar to the congestion tax of Stockholm and London.
We may not be able to copy this scheme completely, because it is an added burden to the public. But it shows the resolve and creativity of other countries in addressing their problems. That’s what we should imitate.
(May 6, 2005 issue)
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