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This report examines the funding of roads and highways in Australia, Brazil, Canada, China, England and Wales, France, Germany, Israel, Italy, Japan, Mexico, Netherlands, South Africa, and Sweden. It provides a description of the infrastructure in the jurisdiction, information on the ownership and responsibility of the roads, and taxes or other ways of collecting money to fund the nation’s infrastructure. If applicable, a discussion of reforms or new initiatives is examined.

A Comparative Summary is included.

Full Report (PDF, 639KB).


Under Australia’s federal arrangements, state and local governments are responsible for road construction and maintenance. However, the federal government provides funding assistance under various programs. The federal government also collects a fuel excise tax, a Goods and Services Tax on fuel and vehicle sales, and a road user charge that applies to heavy vehicles based on fuel consumption, while state governments collect vehicle registration fees and vehicle stamp duties. In addition to federal, state, and local revenue, private sector investment is also a source of funding for some roads, and three states maintain networks of toll roads.

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The Brazilian federal government administers a federal transportation system, which is implemented through federal agencies or by concession, authorization, or lease to a public or private enterprise, or to a public-private partnership. Regardless of the type of administration, the federal government is authorized to apply financial resources to the system. A federal tax levied on the import and sale of oil and oil products, natural gas and its derivatives, and ethanol fuel was instituted in 2001 to finance, among other things, transportation infrastructure programs.

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Under Canada’s Constitution Act, the provinces and territories have exclusive jurisdiction over the building and maintenance of national highways. Local and municipal roads are under the jurisdiction of municipal governments. Public-private partnerships have also been utilized to fund major road infrastructure projects.

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Funding for road construction and maintenance in China derives from a combination of government and commercial sources. Only a small share of funding has been provided by central government budgetary revenue. A 10% vehicle purchase tax is collected on the purchase of vehicles; revenue of the special taxation is dedicated to road development projects. Tolling is widely allowed.

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England and Wales

Roads in England were built and maintained through statutory labor, tolls, and ultimately taxes raised from vehicles paid into a specific fund to provide roads. Currently, all taxes and duties obtained from vehicle taxes and excise duties on fuel are paid directly into the government’s main fund, and monies provided for roads are allocated from the budget.

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French roads are divided into three main categories: municipal, departmental, and national. Different levels of government have jurisdiction over different types of roads, but the construction of new roads is often financed by more than one source. No special tax or duty is specifically tied to funding road infrastructure, except that many French highways are funded by tolls.

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Germany does not have a national highway fund. Federal highways are funded by the federation through a combination of general revenue and receipts from tolls imposed on truck traffic. The revenues from the German taxes on gasoline and motor vehicle registration accrue to the federation, yet they are not tied to highway maintenance or construction.

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Funding for road construction and maintenance in Israel derives from both public and private sources. Public funding is utilized for the development of interurban and municipal roads. The state imposes indirect taxes and fees on transportation-related goods and services; excise taxes on gasoline; and a variety of vehicle fees such as an annual licensing fees, car radio fee, etc. The construction and maintenance of interurban roads in Israel has been delegated to two government companies, the operations of which are partially funded by private sources.

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Italy’s national government provides all funding for national highways, while regions enjoy limited power to fund regional roads. Tax revenue on automobile and gas usage is not applied to dedicated funding for road infrastructure construction. Automobile taxes are determined according to several criteria, such as an automobile’s environmental impact, engine power, or historical interest.

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Japan traditionally constructed highways through highway public corporations, but these corporations incurred huge amounts of debt over the years. In 2005, four highway public corporations were dissolved and the Japan Expressways Holding and Debt Repayment Agency (JEHDRA) and six new highway companies were established. JEHDRA took over the highway assets and debts of four former highway public corporations and leased highways to the highway companies. The government supports JEHDRA, and JEHDRA in turn provides financing to highway companies through grants and debt guarantees. The government constructs and manages those highways that are not profitable by themselves.

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The highway system of Mexico is made up of federal highways, state highways, and rural roads. Federal highways are those that connect with roads from foreign countries; link two or more states of the Federation; and are wholly or mostly built by the Federation with federal funds or through federal grants by individuals, states, or municipalities. Federal highways are built and maintained by the federal government through the Secretariat of Communications and Transportation.

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The Netherlands funds state highways through a national Infrastructure Fund, which is fed by express lane fees and regular tolls. Provinces, municipalities, and district water boards may also set tolls on motor vehicles passing through certain tollgates on state-managed roads. Additionally, the government applies one-time and recurrent taxes on registered motor vehicles, and levies fuel taxes and a general VAT of 21%. Whether or not these taxes are applied to road construction and maintenance is unclear.

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South Africa

The South African National Roads Agency SOC Limited (SANRAL), an independent statutory company whose sole shareholder and owner is the South African government, is in charge of all matters affecting the country’s national road network. Over 80% of South Africa’s national roads are nontoll roads funded largely through government appropriations. The rest are toll roads, over 10% of which are under the direct management of SANRAL, and funded in large part through a mix of toll revenues and capital market borrowings (generated by auctioning government guaranteed and nonguaranteed bonds).

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Sweden finances its highways through municipal and state taxes. The state receives revenue from the taxation of motor vehicles and fuels, and from congestion fees in the two largest cities. Planning for major infrastructure projects is undertaken by the municipalities and the national government.

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Last Updated: 12/30/2020