In UK my yearly MOT records how far my car has driven.

Taxing distance doesn't need to track _where_ the car has been, just how far it's gone.

I seem to recall when selling cars the V5 transfer also has a mileage (so easy to attribute)

It isn't precisely easy (MOT and tax timings won't line up etc) and arrears rather than advance etc. We definitely have enough data to do a fair approximation - just high operational overheads to collect

That depends. Do you also tax when the car is driven outside the country?