GOVERNMENT policy on green tax should be centred around the most efficient means to reduce pollution, not around “essentially arbitrary” targets, a prominent fiscal think tank said yesterday.
In the Autumn Statement the chancellor announced plans to increase the total share of revenue coming from taxes whose primary purpose is to achieve green outcomes, between 2010-11 and 2015-16.
But the Institute for Fiscal Studies (IFS) yesterday said a total tax share goal is not based on achieving environmental outcomes in the most efficient way – which they say should be the goal of green policy. “Taxes should be raised in the most effective way,” the report reads, “rather than to hit some essentially arbitrary target for receipts from one party of the system. Whether environmmental taxes make up a bit more or less of total revenues in 2015-16 than they did in 2010-11 is not of much real consequence.”
And the respected think tank noted that the government’s official definition of what count as green taxes differs both with the definition used by the Office for National Statistics and international convention. These bodies include taxes with big green impacts – like fuel duties – even where they are primarily levied for revenue.