Road transport taxation in Europe is undergoing a major and radical shift away from fixed charges and fuel duties towards pricing according to distance travelled and externalities produced. Implementation is underway in some states, change being led by national schemes for the freight sector only. The UK is considering such a system for implementation by 2008, to use global positioning system technology. \ud The paper reviews the current developments and considers charging scenarios, including a scenario for covering the full external costs of the UK freight industry. Implications for taxation policy are considered, including whether the doctrine of revenue neutrality is consistent with 'sustainable mobility'. Consideration is given to a transition strategy which could bridge between the current level and structure of prices and a future, more economically efficient approach
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