Stop the fraud and extortionate interest

By: Thomas Ström 5/25/18

Lower the surcharge on the congestion taxes


If you have been to Stockholm or Göteborg by your car in recent years, you have surely become aware of the congestion taxes.
If you’re also one of those who have failed to pay the bill on time, you have received a surcharge of 500 SEK per occasion.
Up to now, the state has raised 1.2 billion SEK via these penalties.
If a private company would have done something like this, they would have been convicted of extortionate interest and fraud.

The background is that if you, as a car owner, forget to pay the congestion tax on time, you will receive a surcharge of 500 SEK, even if the original cost is only 10 SEK. That means a penalty of over 5 000 percent. If a private company were to do something similar, they would be forced to close shop. The company would have been classified as fraudulent. But not the state. It only keeps bringing in about 200 extra million a year.

For a long time, both the Swedish Transport Agency and the Swedish Tax Agency have stated that it is inappropriate to charge a surcharge of several thousand percent. But neither the former nor the current government has done anything about it. They see it as an extra source of income.

In Stockholm, the congestion tax was introduced in 2007 and in Gothenburg in 2013. Before the start in Gothenburg, a government investigation suggested that the rules should be amended. The proposal was based on a first delay fee of 100 SEK and, if not paid, a surcharge of 500 SEK.
But despite the investigation and proposal, not a single minister has done anything about it.

The surcharge is a fairly common topic in parliamentary motions. The latest one was on March 23 this year, when Lars Beckman (M) submitted a written question to the Minister of Finance Magdalena Andersson. On April 4, she submitted the following written answer to the Riksdag website:
”The money corresponding to the income from congestion taxes, including revenues from the surcharges, go to important infrastructure initiatives. If the surcharges were to be lowered, it would mean that other money would have to be included in the framework of the congestion tax system. This would entail increased borrowings or increases in the congestion tax itself."

In other words, the state is including the surcharges of the congestion tax in its budget! Does that seem wise?
No, a do-over is imperative. Implement what the government investigation concluded five years ago; first, a reasonable delay fee of approximately 100 SEK and then a surcharge of 500 SEK.
By doing so, a large number of car owners would not feel fooled.