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

Page 1: Introduction

With the discovery of a previously unknown planet, one of the first things we would want to know is its capacity for supporting any form of life. These days we think we know what clues to look for and have even built spacecrafts that can supply much of the data we think we require. Given this human fascination with the life-sustaining properties of other planets, it may seem odd that it is only...
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Page 2: The nature of the problem

Your actions are putting the future of the planet at risk'. Most of us will have heard the warning calls by now. But are we taking notice of them. Unfortunately, there is no guarantee that, left to their own devices, individual people and organisations will take matters such as 'the future of the planet' seriously or acknowledge the part they themselves are playing towards putting the future at...
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Page 3: The role of government

With this kind of scenario, governments have had to become involved at both domestic and international level. Not all governments are equally enthusiastic about 'getting involved'. 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...
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Page 4: Some key questions for government

Questions that governments have been forced to ask themselves include: How can governments ensure that individuals and organisations take their responsibilities towards the environment seriously? How can individuals and organisations best be persuaded to consider and reduce the adverse environmental impact of their own consumption and production activities? What steps might government take to...
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Page 5: HM Customs & Excise

HM Customs & Excise is a government department. 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...
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Page 6: Some features of a ´good´ tax

Taxes that are linked to types and levels of economic activity have one very important feature. People and organisations know that one way to reduce their tax bill is to reduce their level of activity in that particular sphere, e.g. car drivers who want to pay less tax can think in terms of owning a smaller-engined car, reducing their annual mileage, and staying out of congested city centres. A...
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Page 7: Some UK environmental taxes

In recent years the UK government has diversified the range of taxes intended to contribute to environmental improvement. In addition to the well-established taxes on, for example, car ownership and fuel consumption, there are now operating in the UK: Landfill Tax Aggregates Levy Climate Change Levy. These taxes are aimed principally at firms, in their capacity as producers. HM Customs...
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Page 8: Conclusion

The economic activities of organisations and individuals create both benefits and costs not only for themselves but for society as a whole. For example, a new factory may improve an organisation profitability, create jobs, and increase the range of goods and services available. At the same time, however, the presence of the new factory may create noise and congestion, increase demand for...
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