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are classified under Vehicle Ownership Controls. The main alternative is to permitwider vehicle ownership but then control the use made of vehicles; these options areclassified under Vehicle Use Controls. The third option, which can be viewed as asupplement to vehicle ownership and use controls, is to introduce incentives toencourage more efficient use of vehicles and the transport system in general. Theseoptions are classified under Behavioural Incentives.9.3.2 Each option is described and commented on. The most practical options are thencarried through in subsequent sections for detailed discussion of possible implementation.9.4 Vehicle Ownership Controls9.4.1 Vehicle ownership controls seek to limit the size of the vehicle fleet by either fiscal orregulatory means, in this way restricting the number of vehicles available to use theroad system. Vehicle ownership controls can be effective as they tackle the problemat source; they have been used successfully to control traffic growth in both HongKong and Singapore. The key disadvantage of ownership controls is that they arenon-selective; they limit all travel whether in congested or uncongested areas.Vehicle Taxation9.4.2 Two taxes are currently imposed on vehicle ownership: First Registration Tax (FRT)paid on purchase based on the value of the vehicle, and a licence fee paid annuallybased on engine size. Rates of FRT and licence fees were reported in Chapter 3. FRTfor private cars is now set at between 70% and 90% of the import (GIF) value,compared with 15% for all other vehicles. Private car annual licence fees aresignificantly higher than for most other vehicles. There is scope for further increasesin taxation on private cars and other vehicles which are explored later in this chapter.Sty^Vfehicle Quotas9.4.3 Vehicle quotas can be used to manage the growth of the vehicle fleet to a fixednumber of vehicles per year. They are currently used in Hong Kong to restrict the taxiand public light bus (PLB) fleets. The quota for taxis was recently reduced to notmore than 300 new taxi licences per year, following a period of rapid growth. It isimportant that taxi fares should continue to be adjusted to ensure that the demandfor taxi services is in balance with the limited supply of taxis imposed by quotas. Themaximum number of licensed PLBs (red PLBs and green minibuses) has beenfrozen at 4350 since 1976.9.4.4 There are serious problems of extending the quota principle to other vehicle types.The allocation of the vehicle quota to customers would have to be based on price asany other approach would require an assessment of individual needs which wouldpose insuperable problems of selection and control. With a fixed quota and highdemand, prices would undoubtedly rise substantially. To ensure that the increase inprice did not simply go into the motor dealer's pocket, Government would need toestablish a system similar to the taxi licence bidding procedures today. Specificationof the details of a licence bidding system would be very complicated. This optionis also considered not appropriate for goods vehicle as the limitations of a quotasystem might be a restriction on the legitimate needs of industry for vehicles andthus might affect the economy.9.4.5 In the end, vehicle quotas would have the same impact as higher ownership taxes.Quotas have the merit of fixing the vehicle fleet growth rate but pose considerableproblems of administration for most vehicle types.Garaging Requirements9.4.6 A widespread practice in Japan is to restrict vehicle ownership to those who haveoff-street parking places. Proof of parking place must be deposited when a vehicle islicensed, consisting of maps and letters of authority.172