Urban transport tax in the offing

The central government is planning to introduce a one-time urban transport tax on private vehicles in an effort to encourage use of public transport and discourage the use of private vehicles. According to urban transport experts mega cities have 10% of total vehicles in the country, of which 90% are private vehicles. For existing vehicles the urban transport tax will be collected through insurance companies while for new vehicles it will be included as a part of the vehicle registration expenses. Another related measure being planned is a congestion tax in cities and towns which have a very high concentration of private vehicles. The congestion tax would be levied only in high traffic areas of cities and towns such as Connaught Palace in New Delhi. The Urban Development Ministry is considering issuing an advisory to states on the levy of congestion tax. The urban transport tax and congestion tax together are expected to decrease the country’s oil import bill and reduce significantly pollution due to vehicles.