Budget Statement 2010 (P.179/2009 Amd.) Amendment for lodging

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A decision made 1 December 2009 regarding: Budget Statement 2010 (P.179/2009 Amd.) Amendment for lodging - vehicle emission tax.

Decision Reference: MD-TR-2009-0196
Decision Summary Title:	Amendment to the Amendment to the Budget Statement 2010 (P179/2009)		Date of Decision Summary:	1st December 2009
Decision Summary Author:	Head of Financial Planning		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Amendment to the Amendment to the Budget Statement 2010 (P179/2009)		Date of Written Report:	1st December 2009
Written Report Author:	Tax Policy Advisor		Written Report : Public or Exempt?	Public
Subject: Budget Statement 2010 (P179/2009 Amd.) Amendment for lodging.
Decision(s): The Minister approved an Amendment to the Amendment to the Budget Statement 2010 (P179/2009 Amd.) to be forwarded to the Greffe for lodging as soon as possible in advance of the Budget debate on 8 December 2009.
Reason(s) for Decision: An Amendment to the Amendment to the Budget Statement 2010 (P179/2009) from the Minister of Treasury and Resources to be presented to the States to inform the debate on the Budget Statement 2010 (P179/2009).
Resource Implications: There are no financial implications other than those identified in the original amendment.
Action required: Greffier be requested to present attached comment to the States at the earliest opportunity.
Signature:		Position: Senator P.F.C. Ozouf, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Budget Statement 2010 (P.179/2009 Amd.) Amendment for lodging - vehicle emission tax

BUDGET STATEMENT 2010 (P.179/2009): AMENDMENT (P.179/2009 Amd) - AMENDMENT

1) For the words “engine sizes” substitute the words “CO2 emissions” and for the table setting out the amounts of the tax substitute the following table –

“(i) vehicles up to 120g (CO2 g/km)	No annual tax
(ii) vehicles between 121g and 185g	£75 annual tax
(iii) vehicles between 186g and 250g	£150 annual tax
(iv) vehicles over 251g	£250 annual tax”

2) After the words “from September 2010” insert the words “(or the earliest possible date thereafter)”

Report

The Minister for Treasury and Resources would like to propose an amendment to the first Budget amendment of Senator Le Main on the following grounds:

Part 1

CO2 emissions are a better indicator of a vehicle’s emissions than engine capacity. Therefore, to the extent the tax changes behaviour, the change will benefit the environment.
Adopting CO2 emissions will provide some more consistency with the Budget proposals for Vehicle Emissions Duty (VED) and allow the debate to focus on the other more important considerations and differences between them – for example one being an annual tax and the other being a one-off tax on first registration.
Emissions bandings for commercial vehicles and private vehicles are the same so that commercial and private vehicles are treated similarly.
For older vehicles and other vehicles (including commercial) where CO2 emissions data are not available then engine capacity should be used as the basis for tax instead.
In financial terms:
- The replacement of engine capacity by CO2 emissions will not affect the financial implications of the original proposed amendment to the budget. The schedule is an indicative estimate at this stage and would require further research to refine ahead of the enacting legislation.
- Applying the same CO2 emissions bands to private and commercial vehicles will not materially affect the financial implications of the original proposed amendment to the budget.

Part 2

To implement this measure, it would need to be fully researched and consulted on, a collection process developed and primary legislation enacted. It might not be possible to do this by September 2010, hence the proposed amendment to the wording of the proposition.

Financial impact

This amendment does not change the financial implications of the original budget amendment proposed by Senator Le Main and achieves the principal objective of providing funding for the agreed environmental spend.