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Road taxes

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What divides the highways in every prosperous mainland province, yet cannot be found in tropical Hainan? Toll stations.

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The island's toll stations were removed after the provincial government introduced a fuel surcharge in January 1, 1994.

The move raised the status of Hainan, which celebrated only its 10th anniversary as a province in April, to that of pioneer in Beijing's long path to reforming road fees.

The surcharge is now a model on which the Ministry of Communications is formulating a new fuel tax, which aims to eliminate unwarranted fees charged by local governments and allow Beijing to share in the estimated 100 billion yuan annual revenues raised from road and vehicle charges every year.

The Hainan surcharge combined fees for road maintenance, highway transport, expressways and bridge tolls - calculated at 60 per cent of petrol prices.

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The province claimed victory in its road-fee reform by collecting 72 per cent more from the surcharge during its first year of implementation, a result which is believed to have spurred Premier Zhu Rongji to call for a switch from miscellaneous fees levied by local governments to taxes.

As a first step, Beijing wants to reform the nation's transport sector. The proposed fuel tax is expected to replace highway maintenance fees, new-vehicle purchase taxes, passenger transport taxes and cargo taxes.

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