TAXATION BY MOTOR SPIRIT DUTY.
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United Action on the Part of the Motoring and Trade Institutions in the Preparation of a Scheme. Heavy-vehicle Interests Stand Aloof.
AS THE outcome of the invitation of the Departmental Committee on the Taxation and Regulation of Mechanically Propelled Road vehicles, conferences have been proceeding for some considerable time between the various associations representing different classes of motor vehicle owners in Great Britain and others representing the various branches of the motor vehicle industry.
Complete agreement has been reached by these bodies, with the notable exception of the Commercial Motor Users Association and the London and Provincial Omnibus Association, which have finally withdrawn from co-operation with the other bodies. The various bodies which are in complete agreement include the Royal Automobile Club, the Royal Scottish Automobile Club, the Automobile Association and Motor Union and the Auto-Cycle Union, as representing motor vehicle owners ; the Society of Motor Manufacturers and Traders, Ltd., the Scottish Motor Trade Association, the Motor Agents' Association, the Motor Trade Association, the Association of British Motor Manufacturers, the Institute of British Carriage Manufacturers, and the British Cycle and Motorcycle Manufacturers' and Traders' Union, Ltd., representing every branch of the motor vehicle industry.
The two associations which are standing aloof apparently favour the retention of the present system of taxation, which Is upon the basis of horse-power, capacity or unladen weight. Those which are subscribing to the memorandum dealing with the question of taxation, which has been prepared for presentation to the Minister of Transport, have decided to throw the whole of their weight into the advocacy of a, scheme which :—(1) will more equally distribute the burden cif taxation over all classes of motor vehicles ; (2) will meet the various points raised by the Minister of Transport in relation to any reversion to the motor spirit .tax ; (3) will avoid penalizing the users of motor spirit for purposes other than in motor vehicles ; and (4) which shall reduce to a minimum the possibility of loss of revenue by evasion.
The scheme, which the associations have agreed to put forward in their joint names, proposes that the bulk of the required revenue shall be provided by a flat-rate duty per gallon imposed on all imported motor spirit, the remainder to be derived from a reduced tax upon the vehicle. There would be no rebates of duty to any users of motor spirit (except that spirit used for motor 'boat work, aviation, and in the cleaning trade would be duty-free and obtainable under suitable regulations, where possible such spirit being suitably coloured). Steam, electric and producer-gas vehicles would continue to be taxed on the existing method, but no duty would be imposed upon motor spirit produced from raw materials in Great Britain, whilst all imported liquid hydrocarbons would be taxed at the port of entry on their "motor spirit content."
With regard to the definition of, or specification for, motor spirit, which is the great point upon which
• the Customs authorities base their objection to the collection of duty on imported spirits, the following is proposed :—" Any white spirit consisting mainly of hydro-carbons, and having a flash-point (Abel closed test) below 73 degrees Fahr., which, when distilled by the method specified in the memorandum, shall leave not more than 10 per cent. residue at 356 degrees Fahr."
Importers would be at liberty to declare a shipment as motor spirit, but any hydro-carbon spirit not declared as motor spirit would require to be tested,
and, if it had a flash-point below 73 degrees, duty would be levied on the motor spirit content." A method of test is specified for the purpose, and no great difficulty should be experienced. The definition above would exclude kerosenes having a flash-point of 73 degrees Fahr.or over, and also turpentine and materials containing it, such as paints and varnishes. It would include all imported benzole and toluol and most samples of coal-tar naphtha. The whole of this question of definition of spirits and the methods of testing imported parcels of hydrocarbons is set out very fully in the memorandum, but need not be detailed here.
The Productiveness of the Tax.
The signatories to the memorandum point out that the first provisional estimate of the amount required from owners of motor vehicles was 27,000,000 net, but the actual figures recommended and subsequently sanctioned by Parliament were estimated to produce 18,125,000 net, or a gross revenue of 28,450,000 from licence, duties on mechanically propelled road vehicles. The figure of £8,000,000 has often been emphasized in the House of Commons, whereas the actual sums obtained have been, in the year 1.921, 210,335,000, and in 1922 .(January to August 31st), 210,596,000.
Since the duties were sanctioned there has been an artificial and temporary rise in prices, a temporary boom in trade, and large arrears of road maintenance and heavy costs of labour and materials, but these conditions have now changed, and to-day the costs of road maintenance are showing considerable reductions, whilst the arrears are being overtaken. The figure of 210,250,000 as the proceeds of taxation may be taken as excessive, and more than can legitimately be expected to be found in aid of road maintenance and improvement expenditure in 1924. However, taking this. figure, the memorandum shows that it can be obtained in one of the two following ways :— The net total quantity of spirit imported in the 12 months to June 30th last was 258,000,000 gallons, showing an increase on previous years (this figure excludes, of course, motor spirit refined in this country), so that, taking reasonable increases, a consumption in 1924 of 420,000,000 gallons may be expected. Allowing for natural increases in the numbers of vehicles in use, scheme A produces a gross revenue of 210,315,000 on a'm'otor spirit duty of 5d. per gallon, an annual registration duty equal to 2s. 6d. per horse-power on those vehicles now taxed on horse-power, and an annual registration duty of 21 on any goods or hackney vehicle not exceeding 3 tons (unladen weight) and 22 on vehicles exceeding 3 tons. In addition, there would be a registration of 7s. 6d. on each motorcycle, and the revenue from taxation on steam, • electric and producer-gas vehicles.
Scheme B involves a motor spirit duty of 4d. per gallon, but, in order to obtain the necessary revenue, there would have to be a registration duty equivalent to 25 per cent, of the present taxes on those vehicles taxed on horse-power ; motorcycles, gocds vehicles and hackney carriages would also be taxed at a quarter of the present scale' the same tax as at present being paid in respect of steam, electric and producer-gas vehicles.
The memorandum has been presented through the Motor Legislation Committee to the Departmental Committee, and it will, of course, come up for discussion when the Departmental Collimate* sits to take evidence upon it.