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Vehicle externalities Driving or usage taxes Ownership taxes Purchase or acquisition taxes Progressive emission tax Optimal tax policy Although much of the emphasis in taxation studies relates to a particular type of tax, the contribution of this paper by try to combine different taxes in one tax, whereby it was widely agreed that a mixture of the different taxes is regarded an ideal to reduced vehicle emissions. The study used existing empirical literature to prove that the taxes on vehicles alone are not sufficient to reduce vehicles externalities or short-term effects of these taxes, therefore there is need to impose a tax on emission source strongly due to the fact that many contemporary scholars proposed to taxation based on the actual emissions test, and car types/engines. The approach of the study was shown in the diagram which used to design a proposed progressive tax system which consists of a mix of different taxes. Therefore, the current study will add to the current literature, by provides background and details on taxes on vehicles and its operations. The aim will be to comment on them in terms of design and effectiveness in reducing emissions. 1. BACKGROUND The motor vehicle externalities have increased over time and there is more effective measures are required for their reduction [1]. There was increased interest in the world in taxing vehicle characteristics to protect the environment. But, the implementation of these taxes remains also somewhat ambiguous in literature, due to weaknesses such as not considering environmental aspects of transport in their road taxes or the minor elements of such tax role [2]. Therefore, such studies have not considered the taxes on the vehicles to be sufficient to reduce externalities in the long run. For instance, the researchers Beck, et al. [3] and Nel and Nienaber [4] have revealed that "the taxes on passenger vehicles may not be the most effective way of reducing externalities and one instrument alone is not sufficient to achieve the South Africa environmental goals" [4]. On the other hand, regulations of emissions from motor vehicles are mostly reliant on the traditional "command and control" approaches, with a new car tailpipe emissions standards being the majority approach. However, it has been criticized as being inflexible, poorly targeted, incompatible with motorist"s incentives, and ultimately too expensive to be effective [5]. Therefore, several economic incentives were proposed as alternatives. One that is particularly promising is to come up with a system where vehicle owners pay fees based on their respective levels of annual emissions [5]. Because this can achieve a reduction in the negative externalities [6] and