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Change the tax

13th February 1982
Page 2
Page 2, 13th February 1982 — Change the tax
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Which of the following most accurately describes the problem?

IN THE IMMEDIATE pre-Budget period, Sir Geoffrey Howe and his Treasury officials will be inundated with advice on where to place the tax burden for the ensuing twelve months. Unfortunately, most of the advice will be negative. The interested parties will seek to demonstrate how tax reductions in their sector will benefit the entire economy.

The reality of the situation is that the Government requires money to finance its administration, and its source of income is through taxes. Someone must pay.

We cannot expect great reductions in taxes imposed on road transport, although hope springs eternal. What could come about is a change in the basis for collecting vehicle excise tax.

The popular theory is that this will change from a tax on the unladen weight of the vehicle to a gross-vehicle-weight tax. This would be little more than a cosmetic exercise.

But the abolition of the vehicle excise tax and the imposition of an additional fuel tax would, in our view, provide benefits in both financial and operational terms.

The tax would be paid as the vehicle was operating and earning. It would be related to distance covered, condition of engine and weight of vehicle, and there coulci be no evasion.

It is estimated that additional tax of less than 10 pence per gallon would give the Chancellor the revenue he needs, and would obtain, through a vehicle excise tax.

Operators would not pay more. They would pay for the use they made of the road and payment would be spread over the year.

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