Tax Policy to Internalize Road Transport Externalities

Abstract

Road transport is an important sector of the economy, however, its negative impacts on the environment, human health and sustainability of potential economic growth are significant. Transport externalities tend to be neglected within the market process. The damage generated through significant externalities of road transport in Czechia was identified, based on unique data processing, to reach almost 3.5 billion € annually. This chapter presents an overview of internalization taxes and fees, their current rates and generated receipts. If excise duty is disregarded as fundamentally unsuitable for the internalization of externalities, then the receipts from other applied taxes and fees, particularly the road tax, seem to be insufficient. Although economic growth is encouraged, its form is not sustainable in view of the rising phase of the Kuznets curve and the related irreversible environmental impacts.

Citation

David, P. (2024), "Tax Policy to Internalize Road Transport Externalities", Stavárek, D. and Tvrdoň, M. (Ed.) Modeling Economic Growth in Contemporary Czechia (Entrepreneurship and Global Economic Growth), Emerald Publishing Limited, Leeds, pp. 121-136. https://doi.org/10.1108/978-1-83753-840-920241008