27 February 2007
Proposals to introduce an environmental tax in Jersey have been published in a new public consultation launched today by the Minister for Treasury and Resources and the Minister for Planning and Environment.
In 2005 the States debate on fiscal reform required the Treasury Minister to bring forward proposals for environmental taxes. The States Strategic Plan further endorsed this action. This States decision suggested possible additional taxes on the ownership and use of motor vehicles, on the production and disposal of waste and on the consumption of energy.
The fiscal debate decided that Jersey should have a goods and services tax and it was always understood that the existing tax on the purchase of motor vehicles – Vehicle Registration Duty (VRD) - would then be replaced by a form of environmental tax to raise an equivalent sum.
Since then a range of possible environmental taxes have been considered and the extensive research suggests that the environmental tax which would best suit Jersey as a first step would be a Vehicle Emissions Duty (VED).
The income from VED is expected to be £ 7.5m in the first year and this will increase over four years to produce revenue of £10m. As the new VED will replace the existing VRD the first £4m raised each year will be used as the replacement income for VRD. The rest will be used to fund schemes which will bring environmental benefit to Jersey.
The VED model described in the consultation paper means there would be little or no tax on low-polluting vehicles and much higher taxes on those with high emissions.
The proposals are a joint initiative from Senator Terry Le Sueur, Treasury and Resources Minister and Senator Freddie Cohen, Planning and Environment Minister.
Senator Le Sueur said “After replacing the £4 M revenue lost by removing VRD all the proceeds of the tax will be used to fund environmental improvements across the Island by creating environmental funding worth up to £6 M per annum by 2012. This will give an opportunity which Jersey has never had before to agree and prioritise initiatives to achieve real environmental improvements which will benefit everyone in Jersey and safeguard our heritage for future generations.’
Senator Cohen said: ‘The States has announced its commitment to taking responsible action to support the environment and this is an opportunity for Islanders to indicate whether they are prepared to play their part. I believe that people in Jersey are prepared to do their bit – the success of ECO-ACTIVE and the feedback we have had from public surveys shows that. Here we have a real opportunity to have a source of revenue which will fund environmental initiatives. It is my vision that we will ensure that damaging behaviours should be penalised and those who want to behave responsibly should be supported’.
The paper examines various options for environmental taxes that could be levied on waste production, transport and energy use but concludes that the most appropriate tax to begin with is a tax relating to vehicle emissions – Vehicle Emissions Duty (VED). As this is still at the consultation stage the tax design is not complete. It is likely that a VED would be an annual charge levied according to the carbon dioxide emissions specified by the manufacturer for each vehicle. The most polluting and inefficient would be penalised most while cleaner vehicles with low emissions who would pay little or no annual charge. A similar tax exists in the UK and other European countries.
ENDS
Note to news editors:
1. The States decision taken after debating P44 in 2005 required the then Finance and Economics President to ….undertake further research and bring forward…proposals relating to the introduction of environmental taxes….including …additional taxes on the ownership and use of motor vehicles, on the production and disposal of waste and on the consumption of energy.
2. The States Strategic Plan created additional commitments to investigate the use of Environemental Taxes:
SSP 2.10.2 Bring forward a package of environmental tax and spend measures by 2007 that will replace Vehicle Registration Duty by 2008 and fund key deliverables as outlined in a Sustainable Travel and Transport plan.
SSP 4.4.3 Bring forward for consultation and debate in 2007 a package of environmental tax and spend measures
SSP 4.6.3 Bring forward for consultation and debate in 2007 a package of environmental tax and spend measures that address current unsustainable patterns of resources use
3. The Consultation paper recommends that an annual banded Vehicle Emissions Duty is introduced in 2008. The revenue raised will replace the VRD revenue stream (approx £4.0Million annually) as well as raising an addition £6.0 Million annually to be spent on a range of environmental measures
4. Whilst it is not the purpose of the paper to propose detailed tax design at this stage, example information is given here in relation to a similar scheme in the UK which could form the basis of a scheme in Jersey :
Fuel |
Vehicle make |
Engine Size |
CO2 emissions (g/km) |
UK VED band |
Annual Charge |
Petrol |
Peugeot 107 |
1.0 litre |
109 |
B |
40 |
Hybrid |
Honda Civic dual fuel |
1.4 hybrid |
109 |
B |
40 |
Petrol |
Yaris 3 & 5 door |
1.0 litre |
127 |
C |
100 |
Petrol |
Ford Focus |
2.0 litre |
169 |
E |
150 |
Diesel |
BMW X5 |
3.0 litre |
231 |
G |
215 |
Petrol |
Range Rover Sport |
4.4 litre V8 |
352 |
G |
215 |
Source http://www.vcacarfueldata.org.uk
Further information from:
Senator Terry Le Sueur, Minister for Treasury and Resources, Tel 863994
Senator Freddie Cohen, Minister for Planning and Environment Tel 07797 714550
Chris Newton, Director for the Environment, Tel 441600
To Download the consultation documents :To download the FULL consultation document
please click here
To download the SUMMARY consultation document
please click here
To download the online SUMMARY OF QUESTIONS
please click hereFor further information or to return your comments:
Environmental Taxes Consultation
Planning and Environment Department
Howard Davis Farm
La Route de la Trinite
Trinity
Jersey JE3 5JP |
Tel. 01534 441600
Fax 01534 441610
Email environment@gov.je |
gov.je