The Government publish the definition of environmental taxes

As reported on the Government HM Treasury website, the definition of environmental taxes have been explained, to encourage effective policy making, and also measure progress against the Coalition Agreement pledge to increase the proportion of revenue that comes from environmental tax.

Environmental taxes are defined as those which meet all of the following three principles:

• the tax is explicitly linked to the Government’s environmental objectives;
• the primary objective of the tax is to encourage environmentally positive behaviour change; and
• the tax is structured in relation to environmental objectives, for example: the more polluting the behaviour, the greater the tax levied.

“Today’s announcement is an important step in meeting the Government’s commitments on environmental tax, and our broader determination to be the greenest Government ever. By setting out a clear, usable definition of what a green tax actually is, people will be able to judge us against the Coalition Agreement pledge. Indeed, through ambitious policies such as the Carbon Price Floor, this Government is already on track to double the proportion of environmental tax revenue by the end of the Parliament.

“We want a clear approach that delivers a positive environmental impact without adding burdens onto business or households.”

The Government will also continue to explore opportunities to further green the tax system through the course of the Parliament in a way that is consistent with the aims of tax simplification and deficit reduction.

At Budget 2012, the Office for Budget Responsibility forecast revenue in the coming years from the taxes included in the definition as below: