TAXATION PROBLEMS.
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The Case of Commercial Veh!cles.
By Lieut.-Col. A. Hacking, D.S.O., M.C., General Secretary Motor Legislation Committee.
THERE MAY, even now, be a little confusion in relation to the circumstanes in which the owner of a vehicle, constructed or adapted for use for the conveyance of goods, may, or must, take out a licence on horse-power. On the interpretation of the Act as viewed by the Motor Legislation Committee and as now confirmed by the Law Officers of the Crown, if such a vehicle is used on any occasion for purposes other than the conveyance of goods in the course of trade, it muse be licensed on the horsepower basis and not on unladen weight. There is no choice in the matter, either for the owner or the registration authority. Such is, undoubtedly, the legal position, which is described in the last two issues of 272.e Commercial Motor as a flaw in the Act.
May I call attention to yet another flaw, which, perhaps, others may not endorse? The position of hackney carriages is just as anomalous US that of commercial lorries. If the owner of any vehicle, used as a hackney vehicle as defined by the Customs Act, 1888, applies for a licence as such, subject to a certain seating capacity, it would appear that the registration authority must license such vehicle
• aceordingly.
Now, local authorities, so far as I know, only have power to issue regulations as to the character, etc., of hackney vehicles if they are hackney vehicles under the Town Police Clauses Act. In other words, a vehicle which plies for hire on occasion but does not " stand or ply for hire" in the streets is a, hackney vehicle within the meaning of the Finance Act, 1920, hut it is not, necessarily, a hackney vehicle within the meaning of the Town Police Clauses Act.
A Double Purpose Vehicle With a Cheaper Licence.
Therefore, it would appear that if the owner of a commercial lorry wishes, on any occasion, to let his vehicle for hire for a period not exceeding three months, he must take out. a hackney carriage licence, and the fact that it may be used.for the carriage of goods wouid not appear to matter, provided it does not fall under par. 5 of Schedule 2 of the Finance Act, 1920, and is used solely for the conveyance of goods in the course of trade.
It follows that an owner of a 4-ton lorry, who puts in a plank seat with seating capacity for five, should pay £15 or 212 for a hackney carriage licence. He may use such a vehicle to carry five passengers on payment from his private yard, for, in such cases, local by-Jaws relating to hackney vehicles., do not, in general, apply. He is still entitled, so far as I can see, to use-his lorry for the conveyance of goods. In effect, therefore, he pays 212 instead of 230, and is able to do more with his vehicle than if he had paid the higher duty.
It would not be difficult to pursue the criticism of the Act to a " reductio ad absurdum." As a general rule, I should not attempt to indicate possible directions in which owners of different types of vehicles may escape from what are probably the intentions-of the Act, but it is necessary to show how totally inequitable, anomalous and absurd the new schedule of taxation is likely to prove. We are told that the rates of duty are supposed to be proportionate to user, at least to a degree. As a fact, it is becoming realized that, from the point of view of -commercial, hackney, and private vehicles, the basis is nothing of the kind.
The Departmental Committee of the Ministry, in recommending the schedule in substitution for the petrol duties, stated that they were "convinced that 020 the anomalies under any such system (e.g., of petrol (Patios) must in the near future become more numerous and serious than any which are anticipated under a single tax system based on the vehicle." I wonder whether the "flaws in the Act" are really going to change the opinion of the members of that committee in this respect! If it were possible to place a uniform duty, whether Customs or Excise, upon all liquid fuel used by motor vehicles, obviously perfection of incidence would be obtained on the principle of user in relation to internal-combustion engines. Steam and electric engines would not be the subject of real difficulty. The petrol duty has at the moment disappeared, because :— (1) Some difficulty arose as to what constitutes " petrol." (2) Paraffins were presamed to be used in increasing, quantity by commercial vehicles. (a) The collection of duties of Excise on homeproduced spirit is expensive and difficult.
Are these really insuperable obstacles to the reinstitution of a system of taxation proportionate to user'? With reference to the,first objection, I see that no less than 4,000,000 gallons of motor spirit have been imported during the last two months, and a figure of 250,000,000 gallons would hardly appear an overestimate of the quantity likely to be used during the present year. A duty as low as 4d. per gallon would produce more than half the total revenue required from mechanical road traffic for road purposes, and, having regard to the number of vehicles likely to. be on the road this summer, it would not be in the least difficult to provide a system of low carriage duties which would produce the balance required, with a general measure of agreement.
Taxation Scheme to be Continuously Opposed.
There should be no illusion. The present basis of taxation will be consistently and properly resented and opposed, and it must not be taken to be the last word in road finance. If there is agreement by all interests that taxation, to be fair, should, and must, be proportionate to user, there can surely be agreement in the direction of finding a, practical method of carrying ti'he principle into effect. I venture to criticise the Act, and to point out obvious flaws in the measure, with the object-, first and last in my mind, of appealing to all sections of automobile interests to settle among themselves a really permanent and agreed basis, upon which a reasonable contribution from mechanical road traffic may be levied towards the costs of road maintenance and improvement, without involving the very real restrictions to normal development which have already followed the new taxation. It is one of the fundamental aspects of the policy of the Motor Legislation Committee that the principles of the Finance (No. 2) Bill, 1914, should be opted by the Legislature at the earliest possible moment, and that a, contribution from the Imperial Exchequer should be, forthcoming in aid of the objects for which the special taxation of the motoring community is being levied.
That Bill, it may be remembered, contemplated a Treasury contribution of about 24 millions in 1915 towards these objects, and the necessity for same such contribution, emphasized since that date both by the Shortt Committee of 1918 and by the Departmental Committee on Taxation in 1920, is even greater to-day than it was when the original proposal was made.