PROPOSAL TOWARDS A FAIR SYSTEM OF ROAD USER CHARGES IN HUNGARY

Abstract

The highway sector in Hungary faces serious financial difficulties. Funds available are not sufficient for reasonable maintenance and development of the highway network. While fuel taxation give high incomes to the state budget, the Road Fund itself is poorly financed. The present order of Road User Charges is not a real system: it has developed by random decisions according to the actual financial and political needs of the government. It contains a number of inefficient measures causing unnecessary cross-subsidies and uncovered external costs. Having evaluated the international experience on road user charges this paper proposes major changes in the Hungarian system. The role of direct charges (tolls, parking fees) should be increased - these can reflect the real costs of traffic where and when they occur while indirect charges should be kept at fair levels. Complicated taxes, high administrative costs should be avoided. External costs of accidents, noise, air pollution are to be internalised. Goods traffic on roads is to be handled in a market compatible way.