Using environmental and green taxation to boost falling tax revenues needs careful planning by government and policy makers says ACCA (the Association of Chartered Certified Accountants) today as it publishes a position paper called Green taxation in a recession.
With the Government about to consider the recommendations of the Commission on Taxation, Brian McEnery, ACCA Ireland President warns against viewing environmental taxation as a panacea. “Shifting to environmental taxation cannot both solve the environmental crisis and raise significant income via taxation in the long-term. This is because a system aimed at reducing what it is taxing, if successful, will destroy its own tax base. In any event, environmental taxation is only successful if the government is fully committed to creating beneficial environmental results with at least a large proportion of the revenue gained from it.”
Green taxation in a recession offers five clear recommendations:
- Ensure green taxes are global, with global co-ordination of policies and ideas.
- Design and implement green taxation policies carefully – and then measure and analyse the results.
- Consult widely with electorate / business before introducing taxes so they understand what is happening and why.
- Raise awareness of the need for this type of taxation - explain the benefits.
- Make green taxes explicit and transparent, so they are understandable.
Governments must look to use tax policy as an instrument of positive change by incentivising investment in new cleaner technologies across a wide range of industries. When combined with other tax reductions, environmental taxes should be seen as a positive step rather than a threat to taxpayers.
Green taxation in a recession can be found at this link:
http://www.accaglobal.com/pubs/about/public_affairs/unit/global_briefings/green_tax.pdf
