'Car Taxes Necessary To Curb Traffic Congestion'

Transport minister Frank Chan has defended the government’s decision to raise taxes for new private vehicles and increase annual licence fees, dismissing criticism that the changes would increase people's financial burden during the economic downturn while doing little to ease traffic congestion.

Financial Secretary Paul Chan announced a 15 percent increase in the first registration tax and a 30 percent increase in licence fees for private cars in his budget on Wednesday, with the measures taking effect immediately.

The Automobile Association earlier questioned the timing and effectiveness of the move, saying the city’s economy is still struggling under the pandemic and the changes would hardly deter the well-off from buying new cars.

Green groups also questioned the measures, saying they should instead be targeted towards commercial vehicles.

But the transport chief insisted during a press conference on Friday that the changes are necessary, adding that the government has taken into account people’s affordability.

“We have considered the increase of private cars in terms of numbers from about 420,000 to 570,000 within 10 years’ time. The change is indeed a lot. And therefore the congestion has been seriously disturbing or hurting the community day by day. In addition, there is also roadside emission, which is not good for public health. And therefore it has come to a point that we need to take action to curb the growth of private cars,” he said.

The minister said the government will adopt a multi-pronged approach to tackle traffic congestion, saying authorities are carrying out studies on congestion charging and are looking to introduce a pilot scheme on electronic road pricing in Central.