The CBI, previously known as the Confederation of British Industry and one of the largest industry lobbying organizations in that country, is today asking the UK government to undertake a review to make environmental taxes work better.
Subtitled “making environmental taxes work for business”, the CBI’s report emphasizes that “Environmental taxes have the potential to play an important role in unlocking business investment, which is needed to drive private sector growth and tackle environmental impacts.” Furthermore, the CBI states clearly that “it is clear that business supports the use of well designed environmental taxation.”
The report reviews the various environmental taxes currently in use in the UK, including
- Landfill Tax
- Vehicle Excise Duty
- Climate Change Levy
- Renewables Obligation
- Fuel Duty
- Aggregates Levy
- Air Passenger Duty
- Carbon Reduction Commitment
and reviews business aspects of each. The CBI argues that environmental taxes should:
- Have a clear purpose and definition: The government must be clear and precise about the environmental objective of a tax and how this relates to its role in raising revenue.
- Take strategic fit into account: The tax must be carefully designed to complement existing policy instruments. Policy overlap should be avoided.
- Be designed with simplicity at their core: Environmental taxes must be sufficiently simple to understand and implement. Visibility is required but not at the expense of burdensome compliance.
- Offer comprehensive communication and advice: Government should consult thoroughly on all environmental tax changes.
- Provide certainty to businesses: New taxes, and changes to existing taxes, must be introduced with sufficient lead-in times. Rates should be set as far in advance as possible, or an end outcome should be specified.
- Ensure a strong on-going justification: Monitoring taxes post-introduction is important to confirm that a tax is still having the originally intended effect.
Specific environmental tax recommendations are included in the report.
The press release and report can be found at http://www.cbi.org.uk/media-centre/press-releases/2012/06/cbi-calls-on-government-to-commission-independent-review-of-environmental-taxes/