Road tax or car registration charges

Every country implements a different system when it comes to charges for annual car registration or in some countries it is referred to as road tax. Some countries calculate the annual registration fees based on the vehicle's engine capacity while others are calculated based on vehicle weight. It is quite common to have the registration calculated based on vehicle engine capacity but this system is highly unfair. This system penalises anyone whose vehicle has a large engine capacity. The make matters worse the calculation is not linear meaning for every cc the rate of increase is not uniform. In Malaysia, Singapore and Thailand the calculation becomes exponential once the engine capacity exceeds 2,000cc. In Malaysia where the fuel is subsidised the Government wants to discourage people from owning vehicles with large engine capacity since it will affect the Government.

In countries like Australia, NZ and US the car registration is a flat fee regardless of engine capacity and hence it is common to see cars with 5 litre engines or larger. It is based on a user pays concept which makes more sense. The fuel is not subsidised and if you have a large engine capacity the fuel consumption will most likely be much more than a  car with 1500cc engine hence the user will end up paying more for fuel. The comparison in types of cars sold in Australia vs South East Asians countries paints a clear picture of the country's policy. In Asia the bulk of the cars sold are small cars with engine capacities not exceeding 2 litre while in Australia it is common to see cars with 3.5 litres or 5 litre engines.

some countries implement a weight penalty for heavy vehicles. This is done to penalise those heavy vehicle owners because most road surface damage are caused by heavy vehicles. Thailand has a system like this to penalise heavy vehicles. Previously in Japan the car's registration is calculated based on the width of the car. This unique because of the narrow streets in Tokyo. This is why we used to see cars with mirrors placed on the front fender in the 1980s. Japan has since stopped using this system.

In my opinion the user pays concept is the best since the buyer is free to choose how big their vehicle's engine is and they just end up paying for the fuel that they use. There will be a more diverse range of cars on the road and also people will have more freedom of choice.

All this will of course change in the not so distant future with electric cars coming in. The question is how will the Governments calculate the registration charges for electric cars? will it be a standard fixed fee or will it be based on the battery capacity?