Ireland’s road tax system should move away from tolls and fuel taxes and towards congestion charges, according to the ESRI.

It comes as Transport Infrastructure Ireland considers a new multi-point tolling system that would see drivers charged based on the length of a road they use.

On Newstalk Breakfast this morning, ESRI economist Barra Roantree said multi-point tolling would remove some of the “current absurdities” faced by drivers.

Pointing to the M50 in Dublin, he said the current system means that drivers are only charged for crossing the river – which means that many people leave the motorway at the point before returning again further up the road.

He said it is also unfair that one-half of the city is charged to drive to the airport, while the other half is not.

Tax

The ESRI economist said a full overhaul of the system should shift the tax burden away from tolls and excise duty and towards congestion charges.

“We currently raise about €5 billion a year in taxes on motoring,” he said. “That’s about half of what we spend in terms of the education budget every year.

“But given we are going to be electrifying the fleet of vehicles, the revenue from those taxes is going to disappear, so that is the fundamental reason we need a rethink of our motoring taxes.

“You can actually do it in such a way, if we don’t just look at the toll network and look instead at motoring taxes altogether, there is a way to make sure you leave rural drivers and off-peak drivers better off.

“You can do that by shifting the tax burden away from excise duty of fuel - which effectively means that rural and off-peak drivers are overtaxed at the moment - and towards things like congestion charges.”

Road tolls

He said tolls are an “old-fashioned way of raising finance”.

“It doesn’t necessarily make sense and it leads to all these sorts of weird distortions where you push traffic on to roads you would rather keep them off,” he said.

“So again, if you are looking at reviewing and reforming the network tolls on motorways, we also have to look at how we tax motoring more generally across the whole system.”

Excise duty

He said excise duties force rural motorists to take on too much of the motor tax burden.

“There is a way of reducing that by shifting the tax burden away from things like tolls and excise duties and towards congestion charges in the key cities,” he said.

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