THE Government has defended the list-price based company car tax regime it introduced two years ago. Criticism of the system came from 'a significant number of respondents' to the Government's national transport debate which was launched 18 months ago by then Transport Secretary, Dr Brian Mawhinney.

Critics argued that the system, introduced on April 6, 1994, amounted to a subsidy especially since company car drivers clocking up the most business miles paid the least tax, irrespective of the private use element of the car. But in its response to the debate - a 138-page Green Paper, entitled 'Transport: The Way Forward' - the Government says the current system is not intended to subsidise company car users or to provide incentives to drive further.

The Paper also underlines the Government's commitment to motorway tolling and in looking to give more responsibilities to local authorities and, at the same time ease congestion. The Paper says discussions will take place to allow councils to introduce so-called 'congestion charging' on an experimental basis and permit schemes allowing drivers to enter presently congested urban areas. Talks will also be held on the possibility of taxing company-provided car parking spaces.

The report contains more than 20 key measures based on: Better planning of transport infrastructure; Making better use of existing transport systems; Reducing car dependence, especially in towns; Switching emphasis from roads to public transport; Reducing the impact of road freight.