Translated material
Ivanov and roads
On January 1, 2009, a significant event took place in the global road sector: the Chinese authorities carried out a systematic radical reform in the field of pricing in the fuel market and road taxation.
Namely, the government abolished fees and charges that were collected from drivers directly on the roads. The government circular says verbatim the following: “...Inspect all revenue collection points and scrap those that collected the six canceled categories of payments for the use of roads and ferries.” In the official English translation of the Xinhua agency, it is this brutal verb to scrap that appears.
At the same time, the tax on retail sales of gasoline was increased from 0.2 yuan (1 yuan = $0.15) per liter to 1 yuan; for diesel fuel - from 0.1 to 0.8 yuan. In addition, taking advantage of the decline in world oil prices, the Chinese government significantly (by 12-20%) reduced regulated wholesale prices for petroleum products, which avoided a shock increase in retail fuel prices.
Less than three months have passed since the beginning of the reform, so analytical reports and reports have not yet been published. The Chinese will most likely keep tolls on expressways (roads like the American highway). They will have to deal with the very difficult task of distributing centrally collected tax revenues fairly and transparently among road authorities, many of which are private concessionaires with long-term commitments. But one result of the reform is already known today: toll collection points have been scrapped.
Why should this event be considered significant? The fact is that the basic model of road financing, which has been operating for decades in most developed and many developing countries of the world, is based on targeted road taxes included in the price of motor fuels and called road money. In the last 10-15 years, special fees have also been added to this basic part for travel on toll expressways or for entering urban centers. In the total volumes of road financing, the proportion between revenues from road taxes and special fees is exactly like in the popular game - “one hundred to one.”
The Chinese experience fell out of this series. Toll collection points have been located here since the early 1990s on all more or less passable roads, in some places every 15-20 kilometers. Fees for the use of roads and ferries, surcharges for travel on expressways and fees for professional carriers were established.
Simultaneously with the introduction of total toll payment, a real road boom began in China. Private concessionaire companies, “sitting” on a stable income stream from the collection of travel fees, received long-term loans from the National Bank of China, attracted funds from overseas ethnic Chinese, entered the world financial markets - and built, built, built. From 1996 to 2008, the length of China's expressways increased 16 times: from 3.4 to 55 thousand kilometers. The lower network of local roads grew at a similar pace.
For experts, not only the advantages, but also the obvious defects of “payment in Chinese” were no secret. The dispersion of cache streams over tens of thousands of points created ideal conditions for local arbitrariness and large-scale corruption. Thus, according to the XINHUA agency, regulatory authorities identified in 2008 several thousand illegally installed toll collection points, from which over $3 billion in revenue was embezzled.
As the vehicle fleet and traffic volume grew, many of these points became congestion sites. In addition, the adopted system meant the blatant practice of double taxation of all car owners and drivers: firstly, in the price of gasoline, and secondly, directly on the road.
Chinese motorists endured all this. Without much of a stretch, we can say that just 20 years ago there were no roads or cars outside of big cities in China. Approximately three-quarters of all Chinese drivers got behind the wheel quite recently, so most of them have never driven on roads other than new and toll roads. Of course, few of them knew about “Western values” such as the fight against double taxation and consumer protection.
In recent years, the situation has begun to change. In a number of provinces, there were strikes and public demonstrations by taxi drivers and professional carriers who protested against unacceptably high gasoline prices and tolls.
Local experts have long come to the conclusion that it is necessary to switch to a Western tax scheme for road financing. A window of opportunity for such a transition opened due to the fall in world oil prices. And the Chinese immediately took advantage of it.
What does this event have to do with us? The other day, speaking at the board of the Ministry of Transport, Deputy Prime Minister Sergei Ivanov, with reference, first of all, to the Chinese experience, stated that “it is necessary not only to build toll roads, but also to transfer existing roads or sections to toll mode.” It is believed that this will help “optimize” the process of allocating public money for road construction and combat “corruption in this sector.”
In a word, we step on the Chinese rake exactly at the moment when the wise Chinese throw it into the landfill.
Let me remind you that there are formally no targeted road taxes in Russia. At the same time, the share of the tax burden in the retail price of gasoline is, according to various estimates, up to 55-60 percent, so we pay our price for driving on our modest roads in advance and regularly. And the effect of novelty does not work for us: there were no cars, no roads, and suddenly they appeared. Russian motorists (unlike their young Chinese colleagues) have been driving for several years; they know for sure that it was not the party that invented the car and built the roads.
A few words in conclusion. Compared to other problems facing the country, this whole story with road taxes, toll roads and the Chinese experience is a mere trifle. But it perfectly demonstrates the level of awareness and competence of Russian officials and court experts.