A Proposal for The Abolition of VEHICLE EXCISE DUTY- Road Tax - By KAMRUL ARIFIN KHAN By far the most significant “Environmental” taxes in the UK (and virtually all other G-8/G-11 countries) in terms of revenue raised are on transport sector—in particular, taxes on Fuel, but also taxes on car ownership which is often called Road Tax or VED. Transportation (Public and Private) is a vital part of the British society. Road transport is responsible for 22% of the UK’s carbon dioxide (CO2) emissions (cars are responsible for 13%, with other forms of road transport responsible for a further 9%), many environmental and other spill overs. The most costly of which is congestion, others include accidents (the annual death toll on the roads is about 2,600 in the UK), local air pollution (carbon monoxide, nitrogen oxide, and particulates), harm to the landscape and biodiversity, greenhouse gas emissions noise pollution. None of the existing taxes on motoring was introduced for environmental purposes until the last Budget. The first taxes on road in the UK were raised in 1909 and the Road Fund Licence (the ancestor of the current Vehicle Excise Duty) was first introduced in 1921 as charges hypothecated to the maintenance and construction of roads. But taxes on motoring should now be considered in light of their effectiveness in addressing the various spill overs created by driving. From this perspective, we look at the issues around the design of motoring taxes, and in particular at congestion charging and ‘second-best’ options in the absence of such charging. Any such charges will be proportionate and effective when it will be impartially imposed. Are current charges proportionate or impartially imposed? If it is so then my proposal and analysis should not be considered! The Proposal: “Total elimination of VEHICLE EXCISE DUTY- Road Tax disk system and replace it by introducing more environmentally friendly, cost effective and rather fair structured Pay as You Drive tax system.” Objectives: Short term Benefits: Reduce national deficit by cutting cost and maximise revenue. Long term Benefits: Cheaper and simple taxation system that generates maximum revenue for road, traffic improvements and reduce CO2 emissions. Existing Vehicle tax rate: Engine size of the Vehicles (for the vehicle that registered before 1 March 2001) is the main factor to determine the Rates of Vehicles tax brand. Table-1 12-month VED rates for cars (private and light goods) registered before March 2001 VED Band Engine capacity (cc) All car types 2013-2014 N/A Up to 1549 cc £140 N/A Over 1549 cc £225 Source: Budget 2013. (https://gov.uk/vehicle-tax-rate-tables) CO2 emissions and fuel type (if this information isn’t available they’ll be taxed using the old system) of the Vehicles (for the vehicle that registered on or after 1 March 2001) are become the main factors to determine the Rates of Vehicles tax brand. Table-2 12-month Vehicle Excise Duty rates for cars registered since 1st March 2001* VED Band Vehicle CO2 emissions (g/km) Standard rate Petrol/Diesel 2013-2014 First year rate Petrol/Diesel 2013-2014 Standard rate Green car 2013-2014 First year rate Green car 2013-2014 A Up to 100 £0 £0 £0 £0 B 101-110 £20 £0 £10 £0 C 111-120 £30 £0 £20 £0 D 121-130 £105 £0 £95 £0 E 131-140 £125 £125 £115 £115 F 141-150 £140 £140 £130 £130 G 151-165 £175 £175 £165 £165 H 166-175 £200 £285 £190 £275 I 176-185 £220 £335 £210 £325 J 186-200 £260 £475 £250 £465 K* 201-225 £280 £620 £270 £610 L 226-255 £475 £840 £465 £830 M Over 255 £490 £1065 £480 £1055 *Includes cars emitting over 225g/km registered between 1 March 2001 and 23 March 2006. Source: Budget 2013. (https://gov.uk/vehicle-tax-rate-tables) Point of view: Both of The Current Tax Factors for Vehicles are environmentally unfriendly, costly and unfair: Environmentally unfriendly: Engine size of the Vehicles does not determine how many hours the vehicle is used on the road nor how much CO2 it release to the environment, similarly CO2 emission g/km should not be the key factor, rather how much CO2 a Vehicles releases in whole year should be the core factor. Current tax systems neither conclude how much CO2 a particular Vehicle produces nor how much road and traffic facilities it used in an entire tax year. Costly: Enforcing Current Tax disk system involve the following costly measurements- 1. Printing Tax disk and V11(Renewal/Statutory Off Road Notification reminder) for every Vehicle (half yearly or yearly), 2. Post Tax disk (online service) and V11 to every driver(half yearly or yearly), 3. Post Office counter staff hours to issue such Tax Disk after verifying related documentations, 4. Data storage and Maintenance of Tax Disk Database for Administering Authorities and sharing live with Insurance Companies, Police Patrol, and many others related departments, 5. Prosecutions for Tax evasion and related fraud and post recovery (In 2008 it was reported that flaws in DVLA enforcement practices have meant that more than a million late paying drivers per year have evaded detection which lost £214 million in VED revenue during 2006. It was estimated that 6.7% of motorcycles were not taxed in 2007. Since then better systems have reduced the loss to an estimated £33.9 million in 2009/2010. Automatic number plate recognition (ANPR) systems are being used to identify untaxed, uninsured vehicles and stolen cars), 6. Advertising , and 7. Unused tax returns (Refund Tax disk) Unfair: Regarding Engine size, Fuel consumption and CO2 emission Tax Rate should be entirely reasonable for British VED payer (Drivers or the owners of the Vehicle). Both of the current duties are not impartially calculated in respect of following facets for the whole tax period, 1. How much the vehicle is used/driven, 2. How many hours the road/traffic is occupied and 3. How much CO2 are realised to the environment Following two examples will justify the term “unfair” for this context Typical example for Table-1: Vehicle “A” (Engine Size 1549cc) drives 20,000 miles in a particular year, that means it use the facility/occupy 20,000 miles of road space/traffic facilities and the keeper pay road tax at the rate £140.00/year whereas Vehicle “B” (Engine Size 1551cc) drives 5,000 miles in the same twelve months time and the keeper pay road tax at the rate £225.00/year. Is it entirely reasonable for the Driver of Vehicle “B” to pay that amount only for a bigger Engine size though he use less traffic facilities and occupy the road space far less hours than Vehicle ”A”? Typical example for Table-2: Current tax disk allow driver to emit unlimited CO2 to the environment with a fix prize like unlimited talk and message tariff let us make unnecessary call, sand advertising, marketing and publicity messages uncontrollably. Mobile telephone holders are more cautious and accurate to make a call on Pay as you go Tariff. A Patrol fuelled Vehicle ”C” (VED brand B) drives 20,000 miles in a Tax year that means it released up to 2,200kg (20,000X110=22,00,000gm) CO2 to the environment and the keeper pay the Standard rate of £20 whereas another Patrol fuelled Vehicle “D” (VED brand L) drives 5,000 miles in that same twelve months’ time and released up to (5000X255g=12,75,000g) 1275kg CO2 to the environment, this keeper pay road tax at the Standard rate of £475.00/year. How it is fair for the Driver of Vehicle “D” to pay that amount when at the same time the Driver of Vehicle “C” get away with paying as little as £20 though it released nearly double amount of CO2 to the environment for the same time? Proposed “Pay as You Drive” Tax system: Road transport sector accounted for 74% (39,468 ktoe) of total transport energy Consumption in the UK, it was estimated that 64% (25,298 ktoe) was consumed from road passenger transport and 36% (14,170 ktoe) from Freight transport in 2012, cars accounted for three-fifths (40%) of road transport consumption followed by Heavy Good Vehicles (HGV) with 21% and Light Goods Vehicles (LGV) with 14%. Worldwide, motor vehicles currently emit well over 900 million metric tons of CO2 each year. These emissions account for more than 15% of global fossil fuel CO2 releases. Cars accounted for 14% of total CO2 emissions in 2011 (this total does not include international aviation and shipping bunkers), it was above the rates seen between 2000 and 2011, despite the reductions in emissions from cars over this period. Cars accounted for 59.8% of CO2 emissions from road transport in 2011. At least next few decades Fossil Fuel (Petrol, Diesel and LPG/CNG) will remain the main source of energy for moving any wheels on the road. The following figures give us a rough idea of Average Fuel Economy of all UK Cars Urban MPG Extra Urban MPG Combined MPG 28.225 47.327 37.83 1 UK (Imperial) gallon = 4.54609188 litre, 1 litre = 0.21996919 UK (Imperial) gallons. (Source: fuel-economy.co.uk/stats.shtml) In The UK average vehicle drives 12,000 miles per year, so the calculation shows that every year a car uses 320 gallon of fuel in average. The realistic figures are far more complicated to calculate simply because of the following factors:- 1. Size, Age and Condition of Engine 2. Burden on Engine 3. Fuel type and Fuel efficiency of Engine, 4. Road, Traffic and Driving conditions, 5. Daylight and Weather conditions, 6. National Speed limit and 7. Individual (driver’s) skill and attitude. Fossil Fuel’s CO2 emit rates are as follow: Gasoline (Petrol): Energy is obtained from the combustion of Gasoline (Petrol) by the conversion of a hydrocarbon to carbon dioxide and water. The combustion of octane follows this reaction: 2 C8H18 + 25 O2 → 16 CO2 + 18 H2O According to the Environmental Protection Agency, a gallon of gasoline produces around 8.8kg of CO2. Some of this mass comes from the carbon in the fuel; however, much of it comes from oxygen that is combined with the carbon during the burning process. (Source: Environmental Protection Agency: CO2 Per Gallon of Gasoline) The numerical carbon-hydrogen ratio in Petrol is about 8:18. Carbon weighs 12 times as much as hydrogen, so the mass fraction is (8 x 12):18 or 96:18, in other words carbon is about 80% of the mass of gasoline. Each carbon atom combines with two oxygen atoms to form CO2, so the mass of CO2 going out the tail pipe is (0.8 x 44)/12 = 2.9 times the mass of gasoline going in. So, if we burn 1 gallon of gasoline, (3785 ml x 0.75 g/ml= 2.8 kg) you will get 2.9 kg CO2/kg fuel x 2.8 kg fuel= 8.2 kg of CO2 out the tail pipe. Diesel fuel: Every gallon of diesel fuel contains 2,778 grams of pure carbon. Every gram of atomic carbon, when oxidized with oxygen, forms 3.666 grams of carbon dioxide. (This is another way of saying that each molecule of CO2 weighs 3.66 times more than an atom of carbon alone.) Diesel engines convert the chemical energy in fuel to mechanical energy. Energy is released in a series of combustions as fuel reacts with oxygen from the air. The chemical equation of diesel fuel combustion is 4 C12H23 +71 O2 –> 48 CO2 + 46 H2O. In an average liquid hydrocarbon-burning engine, it can be assumed that about 99 % of the fuel will oxidize. (It is assumed that somewhat less than 1% will fail to fully oxidize, and will be emitted as particulates or unburned hydrocarbons instead of CO2). Therefore, we can multiply the amount of carbon per gallon of diesel by the ratio of carbon weight to CO2 weight by 99 % (2,778 g x 3.66 x 0.99 = 10,084 g. =10.08kg) Therefore each gallon of diesel fuel produces, on average, 10,084 g=10.08kg or about 22.2lb of CO2. ehow/how_6023500_calculate-dioxide-emissions-diesel-generator.html#ixzz2ghziliQI LPG (Liquid Petroleum Gas, Varieties of LPG bought and sold include mixes that are primarily propane [C3H8], The chemical equation Is C3H8+10O2–>3CO2+4H2O, primarily butane [C4H10], The chemical equation is C4H10+13O2–>4CO2+5H2O) and CNG (Compressed Natural Gas which is mainly composed of methane, [CH4], The chemical equation Is CH4+2O2–>CO2+2H2O) produce less CO2 then both of the above Fossil Fuels. Above Chemical explanations evident and established the fact that CO2 production is directly related to the amount of fuel the engine burnt regardless of those seven factors. In order to balance the equation my consideration after observation is to tax on the amount of consumption to regulate conclusion. In simple word attached the tax on the amount of Consumption (Fuel) rather than on the production (CO2). Merits of the Proposal: Cost effective: a) Fewer databases: Alongside Vehicles registration database taxation authority stores a separate database for VED which has been shared (live) by Police, Insurance companies and different related agencies. Proposed tax system does not require this hugs database to be stored and maintained. b) Eliminate disk printing expenses and counter service, Cut bureaucracy and postal expenses: Total elimination of Tax disk will save printing and issuing expenses. Elimination of Tax disk reminder namely V11 letter that will save workforces (Printing and packing) and postal expenses (envelops and postal duty) to post them to the Owners (Drivers) of 35 million vehicles (There were 35 million vehicles licensed for use on the roads in Great Britain on 30 June 2013.) yearly or half yearly. (https://gov.uk/government/publications/vehicle-licensing-statistics-great-britain-apr-to-jun-q2-2013) c) Eliminate prosecutions and Recovery/No evasion of Vehicle Excise Duty: The overall rate of unlicensed vehicles ‘in stock’ in Great Britain in 2011 was estimated to be 0.7% that faced prosecutions. This equates to roughly 249 thousand vehicles. It is estimated that VED evasion could have cost around £40 million in lost revenue in Great Britain in 2011/12. The amount was £46 million in 2010/11. The lowest rate of evasion was seen in the bus (0.1%) and goods vehicles (0.4%) tax classes. The highest rate was seen in the motorcycle tax class (2.1%). The private and light goods vehicle tax class (PLG), which accounts for about 89% of all licensed vehicles, had an evasion rate of 0.64%. Some of this revenue will have been recovered through DVLA enforcement activity or through vehicle keepers back-licensing their vehicles. Hundred present cent revenue yet to be collected. According to my proposal as soon as the Engine start the revenue is paid automatically so drivers (domestic or overseas) can neither evade tax nor faced prosecutions any longer, which means 0% lost revenue, 100% (Exemptions Excluded) Revenue collected. That will create Maximum net funds for our road traffic improvements and is it absolutely fair for UK Driver as well as foreigners. VED Staff, Police, prosecutors and court hours will be hoarded as a result. (https://gov.uk/government/publications/vehicle-excise-duty-evasion-estimates-2011) Prioritized to fuel efficiency and cleaner engine: Now a days Britons are more enthusiastic to act on CO2 emission. Effective campaign of the Government already alert public about CO2 production, as a result they start favouring fuel efficiency car and cleaner engine. Hopefully this proposal will encourage Driver even more to act on CO2 emission to the environment and keep the engine clean. Reduce CO2 Emissions(Environmentally friendly): Proper advertising of the propose tax charges will aware drivers further about the CO2 Emission, their responsibilities and costs, as the more they drive, the more they emit CO2, the more they pay. Driver will rather walk or think twice before they make short journeys or in highly conjunct area. As a result CO2 emission will decrease beyond doubt. Foreign Vehicles: There is a big loophole for Current tax system to impose on Foreign Vehicles. It is indeed a complex area but briefly is that if the EU immigrant is a visitor, including those working, they could drive their Vehicle for 6 months without any UK documentation. If they go home for a few weeks the 6 months starts again when they return. This seems to mean that if they go home twice a year for a short holiday they never need to pay UK VED, no matter how long they live in the UK. Surely if someone uses the British roads and traffic facilities they should have to pay, otherwise they are £3 to £10 per week better off, which is absolutely unfair for UK Drivers. This seems to be another valid reason to abolish Road Tax and introduce a Fuel Tax which will pave away such loophole of Current tax system. Overall fairness for Driver (Both British and Foreign): The more you drive, the more you use the road traffic facilities and the more you released CO2, the more you Pay in other words The less you drive, the less you use the road traffic facilities and the less CO2 you released the less you pay. According to proposed tax system every driver will contribute for using UK roads regardless of their nationality. Representative (Realistic): Proposed Proposal of contribution will be represented by every driver/owner using the British Road and Traffic facilities. Contributions are Just, Proportionate and Equivalent if it is implemented (calculated) fairly. Implementation: How much Driver/owner should be charged per unit (gallon or Litre) of fuel? It is considerably complicated calculation to struck the accurate balance between over charged and under charged. Either way this proposal could be utterly failed. Suggested Elements could be contemplated to bargain the right balance, are as follow: 1. Average millage For a tax year, 2. Average fuel consumption Usually higher ratio is observed for Bigger Engine, and 3. The fuel type Petrol, Diesel (the diesel having lower fuel consumption- a common margin is roughly 40% more km travelled for an efficient turbo-diesel engine. The calorific value of diesel fuel is roughly 45.5 MJ/kg (mega joules per kilogram), slightly lower than petrol which is 45.8 MJ/kg. However, diesel fuel is denser than petrol and contains about 15% more energy by volume (roughly 36.9 MJ/litre compared to 33.7 MJ/litre). Accounting for the difference in energy density, the overall efficiency of the diesel engine is still some 20% greater than the petrol engine, despite the diesel engine also being heavier.), LPG (LPG is best suited to light vehicles such as cars and small vans which normally run on petrol. Our estimate of energy density is 65% compared to diesel and about 75% compared to petrol.) And CNG (Compressed Natural Gas is, as its name suggests, the close relative of LNG and as a natural gas it has the same basic characteristics. However, because it is not liquefied it has a lower energy density and is stored at very high pressures; about 200 bar. Our estimate of energy density is 25% compared to diesel or 42% compared to LNG. However tax tariff ratio should be the same ratio of the efficiency of engine and millage covered by burning different type of fuels and should be added to the per unit (gallon or litter) of particular fuel sold. Transitions: Once it is agreed and calculated, the proposed system could take up to 13 months to set up and running despite changeover is not always as easy as it is anticipated. It involves various additions, subtractions and modifications both internally and externally. 1. Internal: VED collecting office, modify refunds process and related data 2. External: Stop issuing tax disk and start collecting fuel duty. Previous prosecution could carry on as usual. Declaration SORN (Statutory Off Road Notification) process will remain the same with a slight change of the procedure. Vehicles exempt from VED: Following types (categories) of vehicles are exempted from VED: 1. Vehicles used by a disabled person 2. Disabled passenger vehicles 3. Mobility scooters, powered wheel chairs and invalid carriages 4. Historic vehicles 5. Electric vehicles 6. Mowing machines 7. Steam vehicles 8. Vehicles used just for agriculture, horticulture and forestry In my proposal no signal vehicle could avoid paying the tax however tax returns could be awarded for the above categories. Suggested fraud control measurements for tax-returns on the above categories: 1. Allow to claim once a year (for all eight Categories): Tax-returns Claim form (could be collected from local library display board, obtained from online and many other ways) should be accompanied with Fuel VAT receipt (to verify the purchase of the amount of fuel) alone with Driver’s identity documents, V5 registration certificate and MOT Certificate (to verify the ownership, amount of mileage the vehicle has done in that entitled year) within 28 days of MOT test. So mileage could be verified against the amount of fuel that particular Vehicle consumed. The verification of the documentations (Driver’s identity, categories of the Vehicles, Fuel VAT receipt, V5 registration and MOT Certificate) could be done at Post Office counter and sand to VED authorities electronically for the refund. 2. Notify the Mileage on the vehicle to DVLA When the specific category is changed (for Category 1,2 and 8): If the vehicle is sold to an able person, Vehicle no longer use for transporting Disable passenger or the Vehicles sold to someone who does not used them for agriculture, horticulture and forestry purpose any longer. The development of Road traffic and transport is a never ending procedure. The budget for this purpose is being increased by 10%-15% every year and authorities have to move funds from other sources (revenue) to cover the cost, which create huge pressure on overall system. To ease this burden cent per cent revenue collection is inevitable. In few decades time fossil fuel crisis is imminent. Scientists all over the world are heavily involved in finding the alternative Fuel/Fuels, still no clear concept is establish. On the other hand they are convinced that they will be able to reduced CO2 emission significantly (particularly in transport sector). In next few decades time, in average, there will be an automobile per household in the world. Therefore we must act first on CO2 emission and we should act fairly. In this purpose we need to find out the fair way of contribution. Fix charges can never be the fair calculations. My proposal is both cost effective and fair. Every driver will pay just amount for their action. So please consider my argument, replace VED by adding it with the fuel tax. This proposal is not only for Great Britain, it could be spread beyond the Border. Hopefully, at least one sticker will disappear from our windscreen in near future!!! --KAMRUL ARIFIN KHAN 11A ONSLOW ROAD SOUTHAMPTON SO14 0JD Mobil: 07446111663 Email: kamrulakhan69@gmail A Proposal for The Abolition of VEHICLE EXCISE DUTY- Road Tax - By KAMRUL ARIFIN KHAN By far the most significant “Environmental” taxes in the UK (and virtually all other G-8/G-11 countries) in terms of revenue raised are on transport sector—in particular, taxes on Fuel, but also taxes on car ownership which is often called Road Tax or VED. Transportation (Public and Private) is a vital part of the British society. Road transport is responsible for 22% of the UK’s carbon dioxide (CO2) emissions (cars are responsible for 13%, with other forms of road transport responsible for a further 9%), many environmental and other spill overs. The most costly of which is congestion, others include accidents (the annual death toll on the roads is about 2,600 in the UK), local air pollution (carbon monoxide, nitrogen oxide, and particulates), harm to the landscape and biodiversity, greenhouse gas emissions noise pollution. None of the existing taxes on motoring was introduced for environmental purposes until the last Budget. The first taxes on road in the UK were raised in 1909 and the Road Fund Licence (the ancestor of the current Vehicle Excise Duty) was first introduced in 1921 as charges hypothecated to the maintenance and construction of roads. But taxes on motoring should now be considered in light of their effectiveness in addressing the various spill overs created by driving. From this perspective, we look at the issues around the design of motoring taxes, and in particular at congestion charging and ‘second-best’ options in the absence of such charging. Any such charges will be proportionate and effective when it will be impartially imposed. Are current charges proportionate or impartially imposed? If it is so then my proposal and analysis should not be considered! The Proposal: “Total elimination of VEHICLE EXCISE DUTY- Road Tax disk system and replace it by introducing more environmentally friendly, cost effective and rather fair structured Pay as You Drive tax system.” Objectives: Short term Benefits: Reduce national deficit by cutting cost and maximise revenue. Long term Benefits: Cheaper and simple taxation system that generates maximum revenue for road, traffic improvements and reduce CO2 emissions. Existing Vehicle tax rate: Engine size of the Vehicles (for the vehicle that registered before 1 March 2001) is the main factor to determine the Rates of Vehicles tax brand. Table-1 12-month VED rates for cars (private and light goods) registered before March 2001 VED Band Engine capacity (cc) All car types 2013-2014 N/A Up to 1549 cc £140 N/A Over 1549 cc £225 Source: Budget 2013. (https://gov.uk/vehicle-tax-rate-tables) CO2 emissions and fuel type (if this information isn’t available they’ll be taxed using the old system) of the Vehicles (for the vehicle that registered on or after 1 March 2001) are become the main factors to determine the Rates of Vehicles tax brand. Table-2 12-month Vehicle Excise Duty rates for cars registered since 1st March 2001* VED Band Vehicle CO2 emissions (g/km) Standard rate Petrol/Diesel 2013-2014 First year rate Petrol/Diesel 2013-2014 Standard rate Green car 2013-2014 First year rate Green car 2013-2014 A Up to 100 £0 £0 £0 £0 B 101-110 £20 £0 £10 £0 C 111-120 £30 £0 £20 £0 D 121-130 £105 £0 £95 £0 E 131-140 £125 £125 £115 £115 F 141-150 £140 £140 £130 £130 G 151-165 £175 £175 £165 £165 H 166-175 £200 £285 £190 £275 I 176-185 £220 £335 £210 £325 J 186-200 £260 £475 £250 £465 K* 201-225 £280 £620 £270 £610 L 226-255 £475 £840 £465 £830 M Over 255 £490 £1065 £480 £1055 *Includes cars emitting over 225g/km registered between 1 March 2001 and 23 March 2006. Source: Budget 2013. (https://gov.uk/vehicle-tax-rate-tables) Point of view: Both of The Current Tax Factors for Vehicles are environmentally unfriendly, costly and unfair: Environmentally unfriendly: Engine size of the Vehicles does not determine how many hours the vehicle is used on the road nor how much CO2 it release to the environment, similarly CO2 emission g/km should not be the key factor, rather how much CO2 a Vehicles releases in whole year should be the core factor. Current tax systems neither conclude how much CO2 a particular Vehicle produces nor how much road and traffic facilities it used in an entire tax year. Costly: Enforcing Current Tax disk system involve the following costly measurements- 1. Printing Tax disk and V11(Renewal/Statutory Off Road Notification reminder) for every Vehicle (half yearly or yearly), 2. Post Tax disk (online service) and V11 to every driver(half yearly or yearly), 3. Post Office counter staff hours to issue such Tax Disk after verifying related documentations, 4. Data storage and Maintenance of Tax Disk Database for Administering Authorities and sharing live with Insurance Companies, Police Patrol, and many others related departments, 5. Prosecutions for Tax evasion and related fraud and post recovery (In 2008 it was reported that flaws in DVLA enforcement practices have meant that more than a million late paying drivers per year have evaded detection which lost £214 million in VED revenue during 2006. It was estimated that 6.7% of motorcycles were not taxed in 2007. Since then better systems have reduced the loss to an estimated £33.9 million in 2009/2010. Automatic number plate recognition (ANPR) systems are being used to identify untaxed, uninsured vehicles and stolen cars), 6. Advertising , and 7. Unused tax returns (Refund Tax disk) Unfair: Regarding Engine size, Fuel consumption and CO2 emission Tax Rate should be entirely reasonable for British VED payer (Drivers or the owners of the Vehicle). Both of the current duties are not impartially calculated in respect of following facets for the whole tax period, 1. How much the vehicle is used/driven, 2. How many hours the road/traffic is occupied and 3. How much CO2 are realised to the environment Following two examples will justify the term “unfair” for this context Typical example for Table-1: Vehicle “A” (Engine Size 1549cc) drives 20,000 miles in a particular year, that means it use the facility/occupy 20,000 miles of road space/traffic facilities and the keeper pay road tax at the rate £140.00/year whereas Vehicle “B” (Engine Size 1551cc) drives 5,000 miles in the same twelve months time and the keeper pay road tax at the rate £225.00/year. Is it entirely reasonable for the Driver of Vehicle “B” to pay that amount only for a bigger Engine size though he use less traffic facilities and occupy the road space far less hours than Vehicle ”A”? Typical example for Table-2: Current tax disk allow driver to emit unlimited CO2 to the environment with a fix prize like unlimited talk and message tariff let us make unnecessary call, sand advertising, marketing and publicity messages uncontrollably. Mobile telephone holders are more cautious and accurate to make a call on Pay as you go Tariff. A Patrol fuelled Vehicle ”C” (VED brand B) drives 20,000 miles in a Tax year that means it released up to 2,200kg (20,000X110=22,00,000gm) CO2 to the environment and the keeper pay the Standard rate of £20 whereas another Patrol fuelled Vehicle “D” (VED brand L) drives 5,000 miles in that same twelve months’ time and released up to (5000X255g=12,75,000g) 1275kg CO2 to the environment, this keeper pay road tax at the Standard rate of £475.00/year. How it is fair for the Driver of Vehicle “D” to pay that amount when at the same time the Driver of Vehicle “C” get away with paying as little as £20 though it released nearly double amount of CO2 to the environment for the same time? Proposed “Pay as You Drive” Tax system: Road transport sector accounted for 74% (39,468 ktoe) of total transport energy Consumption in the UK, it was estimated that 64% (25,298 ktoe) was consumed from road passenger transport and 36% (14,170 ktoe) from Freight transport in 2012, cars accounted for three-fifths (40%) of road transport consumption followed by Heavy Good Vehicles (HGV) with 21% and Light Goods Vehicles (LGV) with 14%. Worldwide, motor vehicles currently emit well over 900 million metric tons of CO2 each year. These emissions account for more than 15% of global fossil fuel CO2 releases. Cars accounted for 14% of total CO2 emissions in 2011 (this total does not include international aviation and shipping bunkers), it was above the rates seen between 2000 and 2011, despite the reductions in emissions from cars over this period. Cars accounted for 59.8% of CO2 emissions from road transport in 2011. At least next few decades Fossil Fuel (Petrol, Diesel and LPG/CNG) will remain the main source of energy for moving any wheels on the road. The following figures give us a rough idea of Average Fuel Economy of all UK Cars Urban MPG Extra Urban MPG Combined MPG 28.225 47.327 37.83 1 UK (Imperial) gallon = 4.54609188 litre, 1 litre = 0.21996919 UK (Imperial) gallons. (Source: fuel-economy.co.uk/stats.shtml) In The UK average vehicle drives 12,000 miles per year, so the calculation shows that every year a car uses 320 gallon of fuel in average. The realistic figures are far more complicated to calculate simply because of the following factors:- 1. Size, Age and Condition of Engine 2. Burden on Engine 3. Fuel type and Fuel efficiency of Engine, 4. Road, Traffic and Driving conditions, 5. Daylight and Weather conditions, 6. National Speed limit and 7. Individual (driver’s) skill and attitude. Fossil Fuel’s CO2 emit rates are as follow: Gasoline (Petrol): Energy is obtained from the combustion of Gasoline (Petrol) by the conversion of a hydrocarbon to carbon dioxide and water. The combustion of octane follows this reaction: 2 C8H18 + 25 O2 → 16 CO2 + 18 H2O According to the Environmental Protection Agency, a gallon of gasoline produces around 8.8kg of CO2. Some of this mass comes from the carbon in the fuel; however, much of it comes from oxygen that is combined with the carbon during the burning process. (Source: Environmental Protection Agency: CO2 Per Gallon of Gasoline) The numerical carbon-hydrogen ratio in Petrol is about 8:18. Carbon weighs 12 times as much as hydrogen, so the mass fraction is (8 x 12):18 or 96:18, in other words carbon is about 80% of the mass of gasoline. Each carbon atom combines with two oxygen atoms to form CO2, so the mass of CO2 going out the tail pipe is (0.8 x 44)/12 = 2.9 times the mass of gasoline going in. So, if we burn 1 gallon of gasoline, (3785 ml x 0.75 g/ml= 2.8 kg) you will get 2.9 kg CO2/kg fuel x 2.8 kg fuel= 8.2 kg of CO2 out the tail pipe. Diesel fuel: Every gallon of diesel fuel contains 2,778 grams of pure carbon. Every gram of atomic carbon, when oxidized with oxygen, forms 3.666 grams of carbon dioxide. (This is another way of saying that each molecule of CO2 weighs 3.66 times more than an atom of carbon alone.) Diesel engines convert the chemical energy in fuel to mechanical energy. Energy is released in a series of combustions as fuel reacts with oxygen from the air. The chemical equation of diesel fuel combustion is 4 C12H23 +71 O2 –> 48 CO2 + 46 H2O. In an average liquid hydrocarbon-burning engine, it can be assumed that about 99 % of the fuel will oxidize. (It is assumed that somewhat less than 1% will fail to fully oxidize, and will be emitted as particulates or unburned hydrocarbons instead of CO2). Therefore, we can multiply the amount of carbon per gallon of diesel by the ratio of carbon weight to CO2 weight by 99 % (2,778 g x 3.66 x 0.99 = 10,084 g. =10.08kg) Therefore each gallon of diesel fuel produces, on average, 10,084 g=10.08kg or about 22.2lb of CO2. ehow/how_6023500_calculate-dioxide-emissions-diesel-generator.html#ixzz2ghziliQI LPG (Liquid Petroleum Gas, Varieties of LPG bought and sold include mixes that are primarily propane [C3H8], The chemical equation Is C3H8+10O2–>3CO2+4H2O, primarily butane [C4H10], The chemical equation is C4H10+13O2–>4CO2+5H2O) and CNG (Compressed Natural Gas which is mainly composed of methane, [CH4], The chemical equation Is CH4+2O2–>CO2+2H2O) produce less CO2 then both of the above Fossil Fuels. Above Chemical explanations evident and established the fact that CO2 production is directly related to the amount of fuel the engine burnt regardless of those seven factors. In order to balance the equation my consideration after observation is to tax on the amount of consumption to regulate conclusion. In simple word attached the tax on the amount of Consumption (Fuel) rather than on the production (CO2). Merits of the Proposal: Cost effective: a) Fewer databases: Alongside Vehicles registration database taxation authority stores a separate database for VED which has been shared (live) by Police, Insurance companies and different related agencies. Proposed tax system does not require this hugs database to be stored and maintained. b) Eliminate disk printing expenses and counter service, Cut bureaucracy and postal expenses: Total elimination of Tax disk will save printing and issuing expenses. Elimination of Tax disk reminder namely V11 letter that will save workforces (Printing and packing) and postal expenses (envelops and postal duty) to post them to the Owners (Drivers) of 35 million vehicles (There were 35 million vehicles licensed for use on the roads in Great Britain on 30 June 2013.) yearly or half yearly. (https://gov.uk/government/publications/vehicle-licensing-statistics-great-britain-apr-to-jun-q2-2013) c) Eliminate prosecutions and Recovery/No evasion of Vehicle Excise Duty: The overall rate of unlicensed vehicles ‘in stock’ in Great Britain in 2011 was estimated to be 0.7% that faced prosecutions. This equates to roughly 249 thousand vehicles. It is estimated that VED evasion could have cost around £40 million in lost revenue in Great Britain in 2011/12. The amount was £46 million in 2010/11. The lowest rate of evasion was seen in the bus (0.1%) and goods vehicles (0.4%) tax classes. The highest rate was seen in the motorcycle tax class (2.1%). The private and light goods vehicle tax class (PLG), which accounts for about 89% of all licensed vehicles, had an evasion rate of 0.64%. Some of this revenue will have been recovered through DVLA enforcement activity or through vehicle keepers back-licensing their vehicles. Hundred present cent revenue yet to be collected. According to my proposal as soon as the Engine start the revenue is paid automatically so drivers (domestic or overseas) can neither evade tax nor faced prosecutions any longer, which means 0% lost revenue, 100% (Exemptions Excluded) Revenue collected. That will create Maximum net funds for our road traffic improvements and is it absolutely fair for UK Driver as well as foreigners. VED Staff, Police, prosecutors and court hours will be hoarded as a result. (https://gov.uk/government/publications/vehicle-excise-duty-evasion-estimates-2011) Prioritized to fuel efficiency and cleaner engine: Now a days Britons are more enthusiastic to act on CO2 emission. Effective campaign of the Government already alert public about CO2 production, as a result they start favouring fuel efficiency car and cleaner engine. Hopefully this proposal will encourage Driver even more to act on CO2 emission to the environment and keep the engine clean. Reduce CO2 Emissions(Environmentally friendly): Proper advertising of the propose tax charges will aware drivers further about the CO2 Emission, their responsibilities and costs, as the more they drive, the more they emit CO2, the more they pay. Driver will rather walk or think twice before they make short journeys or in highly conjunct area. As a result CO2 emission will decrease beyond doubt. Foreign Vehicles: There is a big loophole for Current tax system to impose on Foreign Vehicles. It is indeed a complex area but briefly is that if the EU immigrant is a visitor, including those working, they could drive their Vehicle for 6 months without any UK documentation. If they go home for a few weeks the 6 months starts again when they return. This seems to mean that if they go home twice a year for a short holiday they never need to pay UK VED, no matter how long they live in the UK. Surely if someone uses the British roads and traffic facilities they should have to pay, otherwise they are £3 to £10 per week better off, which is absolutely unfair for UK Drivers. This seems to be another valid reason to abolish Road Tax and introduce a Fuel Tax which will pave away such loophole of Current tax system. Overall fairness for Driver (Both British and Foreign): The more you drive, the more you use the road traffic facilities and the more you released CO2, the more you Pay in other words The less you drive, the less you use the road traffic facilities and the less CO2 you released the less you pay. According to proposed tax system every driver will contribute for using UK roads regardless of their nationality. Representative (Realistic): Proposed Proposal of contribution will be represented by every driver/owner using the British Road and Traffic facilities. Contributions are Just, Proportionate and Equivalent if it is implemented (calculated) fairly. Implementation: How much Driver/owner should be charged per unit (gallon or Litre) of fuel? It is considerably complicated calculation to struck the accurate balance between over charged and under charged. Either way this proposal could be utterly failed. Suggested Elements could be contemplated to bargain the right balance, are as follow: 1. Average millage For a tax year, 2. Average fuel consumption Usually higher ratio is observed for Bigger Engine, and 3. The fuel type Petrol, Diesel (the diesel having lower fuel consumption- a common margin is roughly 40% more km travelled for an efficient turbo-diesel engine. The calorific value of diesel fuel is roughly 45.5 MJ/kg (mega joules per kilogram), slightly lower than petrol which is 45.8 MJ/kg. However, diesel fuel is denser than petrol and contains about 15% more energy by volume (roughly 36.9 MJ/litre compared to 33.7 MJ/litre). Accounting for the difference in energy density, the overall efficiency of the diesel engine is still some 20% greater than the petrol engine, despite the diesel engine also being heavier.), LPG (LPG is best suited to light vehicles such as cars and small vans which normally run on petrol. Our estimate of energy density is 65% compared to diesel and about 75% compared to petrol.) And CNG (Compressed Natural Gas is, as its name suggests, the close relative of LNG and as a natural gas it has the same basic characteristics. However, because it is not liquefied it has a lower energy density and is stored at very high pressures; about 200 bar. Our estimate of energy density is 25% compared to diesel or 42% compared to LNG. However tax tariff ratio should be the same ratio of the efficiency of engine and millage covered by burning different type of fuels and should be added to the per unit (gallon or litter) of particular fuel sold. Transitions: Once it is agreed and calculated, the proposed system could take up to 13 months to set up and running despite changeover is not always as easy as it is anticipated. It involves various additions, subtractions and modifications both internally and externally. 1. Internal: VED collecting office, modify refunds process and related data 2. External: Stop issuing tax disk and start collecting fuel duty. Previous prosecution could carry on as usual. Declaration SORN (Statutory Off Road Notification) process will remain the same with a slight change of the procedure. Vehicles exempt from VED: Following types (categories) of vehicles are exempted from VED: 1. Vehicles used by a disabled person 2. Disabled passenger vehicles 3. Mobility scooters, powered wheel chairs and invalid carriages 4. Historic vehicles 5. Electric vehicles 6. Mowing machines 7. Steam vehicles 8. Vehicles used just for agriculture, horticulture and forestry In my proposal no signal vehicle could avoid paying the tax however tax returns could be awarded for the above categories. Suggested fraud control measurements for tax-returns on the above categories: 1. Allow to claim once a year (for all eight Categories): Tax-returns Claim form (could be collected from local library display board, obtained from online and many other ways) should be accompanied with Fuel VAT receipt (to verify the purchase of the amount of fuel) alone with Driver’s identity documents, V5 registration certificate and MOT Certificate (to verify the ownership, amount of mileage the vehicle has done in that entitled year) within 28 days of MOT test. So mileage could be verified against the amount of fuel that particular Vehicle consumed. The verification of the documentations (Driver’s identity, categories of the Vehicles, Fuel VAT receipt, V5 registration and MOT Certificate) could be done at Post Office counter and sand to VED authorities electronically for the refund. 2. Notify the Mileage on the vehicle to DVLA When the specific category is changed (for Category 1,2 and 8): If the vehicle is sold to an able person, Vehicle no longer use for transporting Disable passenger or the Vehicles sold to someone who does not used them for agriculture, horticulture and forestry purpose any longer. The development of Road traffic and transport is a never ending procedure. The budget for this purpose is being increased by 10%-15% every year and authorities have to move funds from other sources (revenue) to cover the cost, which create huge pressure on overall system. To ease this burden cent per cent revenue collection is inevitable. In few decades time fossil fuel crisis is imminent. Scientists all over the world are heavily involved in finding the alternative Fuel/Fuels, still no clear concept is establish. On the other hand they are convinced that they will be able to reduced CO2 emission significantly (particularly in transport sector). In next few decades time, in average, there will be an automobile per household in the world. Therefore we must act first on CO2 emission and we should act fairly. In this purpose we need to find out the fair way of contribution. Fix charges can never be the fair calculations. My proposal is both cost effective and fair. Every driver will pay just amount for their action. So please consider my argument, replace VED by adding it with the fuel tax. This proposal is not only for Great Britain, it could be spread beyond the Border. Hopefully, at least one sticker will disappear from our windscreen in near future!!! --KAMRUL ARIFIN KHAN Mobil: 07446111663 Email: kamrulakhan69@gmail
Posted on: Fri, 18 Oct 2013 02:02:08 +0000
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