Matching taxation principles with environmental policies
A HM Customs & Excise case study

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Environment, governments, taxes, tax, waste, customs, consumers, excise, producers, protect, economic activity, fuel, car, planet, taxation.


This case study looks at one of the main ways in which governments are becoming involved in co-ordinated efforts to protect society and 'save the planet'.

It focuses on how governments can introduce taxation policies and practices that are designed to bring about changes in human behaviour and its impact on the environment.

In particular, it concentrates on the use of environmental taxes, and the important role played by HM Customs & Excise in administering these taxes in support of the UK government's hopes and plans for environmental improvement.

In some countries, including the UK, some previous governments have believed economies work best when government intervention (in the form of ownership, control, legislation and regulation) in the economic activities of individuals and firms is kept to a minimum.

take their responsibilities towards the environment seriously?

It believes that tax structures really can change economic behaviour, and for the better.

Its aim is 'to provide a world class tax and customs service in accordance with government objectives'. In pursuit of its aim it sets out to:

  • collect a range of duties and taxes (including VAT) accurately, on time and in a courteous and impartial manner
  • protect UK and business interests through the control of imports and exports.

HM Customs & Excise also has a unique role as a front-line organisation for protecting society against the threat of illegal drugs, firearms and, more recently, paedophile materials.

At the time of each Budget, the Chancellor of The Exchequer reviews the rates for the various duties on different types of fuel, after taking into account relevant economic, social and environmental factors e.g. hardship for people living in remote rural areas; levels of vehicle exhaust pollution in inner cities; representations from interest groups within the fuel, power and transport industries.

Learning outcomes:

As a result of carefully reading this case study, students should be able to:

  • understand why governments have become increasingly involved in environmental protection
  • appreciate some principles of indirect taxation and how they link to environmental policies
  • recognise that HM Customs & Excise has dual roles as a protective and tax collecting organisation
  • explain the key role of HM Customs & Excise in administering environmental taxes.

HM Customs & Excise | Matching taxation principles with environmental policies