EUROSTAT
Directorate E: Sectoral and regional statistics
Unit E7: Environmental accounts and climate change /
Doc. ENV/ERT/TF/05(October 2010)
Original in EN
Draft methodological guide on "Environmentally related transfers"
Vol I Environmental Taxes
version as of 04Octobre 2010
This document was prepared by: Marco Orsini, Céline Martin(ICEDD)and Anda Marina Georgescu(Eurostat)
Comments were received from: Maria José Lopez(ICEDD), EA Team(Eurostat)
Task Force on Environmentally related transfers
of the Working Group on
"Environmental expenditure statistics"
Meeting of 14-15 October 2010
LisbonINEBuilding, Room Salão Nobre
Environmentally related transfers— vol I Environmental Taxes
Methodological Guide (Revision 2010)
The revised environmental tax manual will represent one of the two main parts of a methodological handbook on environmentally relatedtransfers. The second part will be devoted to support measures such as subsidies. It intends to give to the TF a first view on the proposals for updating/changing the 2001 version and to discuss/decide on them.
More information on the EuropeanUnionisavailableontheInternet (
Luxembourg:OfficeforOfficialPublicationsoftheEuropeanCommunities,20xx
ISBNxxx
ISSN xxx
Doi xxx
Cat. No xxx
Theme: Environment and energy
Collection: Methodologies and working papers
©EuropeanCommunities,20xx
CONTENTS
Preface
Acknowledgements
Glossary
Abbreviations and Acronyms
1Introduction
1.1 Policy context
1.2 Purpose and scope
1.3 Structure and organisation of the handbook
2Definitions and concepts
2.1 Definition of taxes
In the National Accounts:
Other definitions of taxes, fees and charges
2.2 Definition of environmental taxes
2.3 Delimitation of environmental taxes, fees, charges(system boundaries)
2.4Main categories of environmental taxes
3Framework for data collection
3.1Listing the environmental taxes
3.2The tax rules
3..3Tax revenue data
3.4Physical data on tax bases
3.5Effective tax rates on the tax bases
3.6Tax revenue on the tax bases
3.7Economic activity/sector which is paying the tax
3.8Market prices of environmentally related products
4Presentation and interpretation of data - Tables and indicators
4.1Tax revenue by tax and tax category
4.2Tax revenue by tax category and industry/user
4.3Nominal tax rates and tax rules
4.4Effective tax rates, revenues, volumes and prices by tax base
4.5Indicators
Annex 1: Glossary of terms for environmental taxes
Annex2:Examples
Annex 3: Eurostat Survey on env. taxes by sector
Annex 4: Published information on environmental taxes
References
Preface
To face environmental problems, extensive and profound changes to existing production and consumption patterns are needed. These changes involve substantial economic costs and can also considerably affect labour and capital markets. The search for instruments capable of producing behavioural changes across all sectors at minimal cost and impact is causing policy-makers to pay much closer attention to incentive-based tools, that is, economic tools for the environment (also called market based instruments). Therefore, economicinstrumentsforpollutioncontrolandnaturalresourcemanagement areanincreasinglyimportant partofenvironmentalpolicyintheEUandthereisconsiderableinterestininformationaboutthesetopics. Theeconomicinstrumentsincludetaxes,fees,stateaid,pollutioncharges,deposit-refund systems,etc.
The European Strategy for Environmental Accounting (ESEA) identifies environmentally related taxes as one core module of Environmental Accounts to be produced regularly and in a timely fashion in order to support policy making. By updating the 2001 Statistical Guide on Environmental Taxes, Eurostat together with DG Taxation and Custom Unions is improving the methodological foundation for harmonized data on environmental taxes across Europe.
Environmentally related tax revenues at Eurostat record and present data on environmentally related taxes in a way that is compatible with the System of National Accounts. They record national economies’ environmentally related tax revenues in total and in a breakdown by economic activities as delineated in ESA 95. Economic activities comprise production activities by industries as well as private households’ activities.
ThisManualpresents guidelinesforcompiling statistics onenvironmentaltaxes,including definitionsand concepts,datasourcesandestimationmethods. Theguidelinesarebasedonaharmonised statistical frameworkdevelopedsince1997,jointlybyEurostat,theEuropeanCommission’s DirectorateGeneral EnvironmentandDirectorateGeneralTaxationandCustomsUnion,theOrganisation ofEconomicCo- operation andDevelopment(OECD)andtheInternationalEnergyAgency(IEA) and on the experience gathered in more than ten years of data collection.
It aims to provide a step-by-step recipe for those involved in compiling data on the environmentally related taxes and to ensure the comparability of methods for compiling, analysing and interpreting data. Its purpose is to facilitate the development and production of harmonised data and to enable more rigorous and improved cross-country comparison of data. It provides users of the handbook with supportive recommendations. Full implementation of these recommendations should help to ensure that data compiled and maintained on a consistent basis in all Member States of the European Statistical System (ESS) improves in comparability and in quality.
Therefore, the Manual needs to be detailed and comprehensive. Due to its clear focus on the practical implementation, it complements international references such as the UN System of Integrated Environmental and Economic Accounting (SEEA 2003). For national compilers the Manual may serve as a practical compilation guide. Interested data users may also benefit from this publication as a source of background information and clarification.
Acknowledgements
To be filled in
Glossary[MO1]
Charges
TheOECDdefineschargesascompulsory, requitedpaymentstoeithergeneralgovernment ortobodiesoutsidegeneralgovernment,suchasforinstanceanenvironmental fundora water managementboard.Chargesareseenaspaymentsforservices.
Directtaxes
Anothertermfortaxesonincome,wealthetc.
Duties
Anothertermfortaxesonproducts(withtheexceptionofVAT).
Effectivetaxrates
The taxes actually paid per unit of the different products and activities. Should reflect exemptions, reducedratesetc,inadditiontothenominaltaxrates.
Environmentaltax
Ataxwhosetaxbaseisaphysicalunit(oraproxyofit)ofsomethingthathasaproven, specific negativeimpactontheenvironment.
Exciseduties
Anothertermfortaxesonproducts(withtheexceptionofVAT),inparticulartaxesonthe domesticconsumptionofcertaingoods.
Fees
Thesameascharges(seedefinitionabove).
Indirecttaxes
Anothertermfortaxesonproductionandimports.
Levies
Compulsorypayments,i.e.bothtaxesandfees/charges.Oftenalsousedinanarrower sense, fortaxesonproduction.
Nominaltaxrates
Thetaxesperunitofthedifferentproductsandactivities,asdescribedinthetaxlaw.
Taxes
Inthenationalaccounts,taxesaredefinedascompulsory, unrequitedpaymentstogeneral government.Taxesareunrequitedinthesensethatbenefitsprovidedbygovernment to taxpayers arenotinproportiontotheirpayments.
Taxbase
Theproduct oractivitythatthetaxisleviedupon.Foranenvironmentaltax,thetaxbasecan be e.g.emissionsof NOx ortheconsumptionofpetrol.
Abbreviations and Acronyms
To be filled in
1Introduction
1.1 Policy context
Economicinstrumentsforpollutioncontrolandnaturalresourcemanagement areanincreasinglyimportant partofenvironmental policyinEUandOECDcountries.Therangeofinstrumentsincludesenvironmental taxes, fees and charges, tradable permits, deposit-refund systems and subsidies.
1.2 Purpose and scope
Theseguidelinesfocusonthedevelopmentofstatisticsforenvironmentaltaxes.This isanarea wherebasic dataisgenerallyreadilyavailableandcomparable acrosscountries.Thestatisticscoverrevenuedataand information ontaxrulesandregulations.
Theenvironmentaltaxstatisticsguidelinesarebasedonaharmonisedstatisticalframework(seeOECD
1997)developedin1997,jointlybyEurostat,theEuropeanCommission’s DirectorateGeneralEnvironment andDirectorateGeneralTaxationandCustomsUnion,theOrganisation ofEconomicCo-operation and Development (OECD) and the International Energy Agency (IEA). The objectives were to prepare a statisticalframeworkthatwould serve asthebaseforregularcollectionandpublicationofdataontheuseof environmentaltaxesinEUandOECDcountries.Theinternationalcomparabilityofthedatawasconsidered tobeofparticularimportance,inordertofacilitatecross-countryanalysesofenvironmentaltaxation.Another importantconsiderationduringthedevelopmentoftheframeworkwas thatthebasicdata requiredshouldbe readilyavailable.
DG Taxation and Customs Union collects environmental tax revenue statistics from MemberStates and Norway. These data are available since 1995. Eurostat is responsible with final data validation and dissemination (see for example the Eurostat’s publication “Taxation trend in the European Union”).
Beside the total environmental tax revenue, Eurostat collects by the means of a yearly survey also data on environmental taxes by economic activities. Thus for the countries answering to this survey, environmental taxes revenue data are available by type and by the sectors that paid the taxes.
Informationaboutenvironmental taxesisimportantforareassuchasenvironmental policyandfiscalpolicy andreform,aswellasforanalytical purposes. Apolicyissuethathasbeenofparticularinterestinrecent yearsisgreen taxreform,which involvesincreasingtaxes ontheuseoftheenvironmentandreducingtaxes onothertaxbases,inparticularlabour.
Forfiscalpolicyandreform,revenuedata,intheformofanaggregateoverviewofthestructureandchanges instructureofthetaxationsystem,isimportant.Thisincludesenvironmental taxrevenueasashareofall revenuefromtaxesandsocialcontributions, andthedistributionofrevenueamongaggregatetaxbases. Internationalcomparability ofthedataisimportant,sincethistypeofanalysisofteninvolvescomparing policiesindifferentcountries.However,comparisons betweencountriesaresometimescomplicatedby structuraldifferences. Apaymentthatistreatedasataxinonecountrymaybeorganiseddifferentlyand therefore classifiedasafeeinanothercountry,forexample.[MO2] Thus, it is important to collect also data on some environmental fees and charges, and this manual recommends what to do with these items.
For both fiscal and environmentalpolicy, a catalogue describing the different environmentaltaxes is important. Thisincludesinformationontaxrates,exemptions,refunds,recipientsofthetaxrevenueetc.
Examplesof analysisof environmentaltaxesareestimatesof theenvironmentalimpactof acertaintax,such asthereductioninpollutionresultingfromintroducing anewtaxorfromincreasingtheratesofanexisting tax.Forthesepurposes,physicaldataonthetaxbases(e.g.emissions,wasteandenergyproducts)and dataonmarketpricesoftheproductsinvolved,areneeded.Detaileddescriptions ofthetaxrulesarealso importantfortaxanalysis.Estimatingtheeffectofa taxalsorequiresinformationaboutpricingbehaviour,i.e. howmuchofthetaxisbeingpassedontobuyers,andaboutthepriceelasticity ofdemand fortheproducts involved.Priceelasticitiesandpricingbehaviourareoutsidethescopeofenvironmental taxstatistics, however.
1.3 Structure and organisation of the handbook
Theseguidelinesareorganisedasfollows.
Section2discussesthedefinitionandclassificationofenvironmental taxesandoftaxes,feesandcharges leviedbygovernmentingeneral.Section3givesanoverviewofthe typeofinformationthat maybeincluded inenvironmentaltaxstatistics.Datasourcesandestimationmethodsarediscussedinsection4.Insection5,
asetoftablesandindicators forpresenting informationaboutenvironmentaltaxesissuggested.Annex1providesdescriptionsofenvironmental taxes with examples from EU countries. Annex 2 provides description of Eurostat’s survey on environmental taxes by sector. Finally,Annex3givesanoverviewofinformationonenvironmentaltaxesthatispublishedby international institutions.
2Definitions and concepts
2.1Definition of taxes
In the National Accounts:
IntheESA95,therearethreemaincategoriesoftaxes:
Taxesonproductionandimports(D.2)
Currenttaxesonincome,wealth,etc.(D.5)
Capitaltaxes(D.91)
Taxesonproduction andimportsaresometimes calledindirecttaxes,whiletaxesonincome,wealthand capital arecalleddirecttaxes.ThisterminologyisnolongerusedinthecurrentESA,however.
Mostenvironmentaltaxesareinthecategorytaxesonproductionandimports.Thiscategoryisdefinedin thefollowingwayinESA95§ 4.14and4.15:
Taxesonproductionandimports(D.2)consistofcompulsory,unrequitedpayments,incashorin kindwhichareleviedby generalgovernment,or by theInstitutionsof theEuropeanUnion,in respect ofthe productionand importationofgoodsand services,the employmentoflabour,the ownershipor useofland,buildingsorotherassetsusedinproduction. Thesetaxesarepayablewhetherornot profitsaremade.
Taxesonproductionandimportsaredividedinto:
a)taxesonproducts(D.21):
(1)valueaddedtypetaxes(VAT)(D.211);
(2)taxesanddutiesonimportsexcludingVAT(D.212):
–importduties(D.2121);
–taxesonimportsexcludingVATandimportduties(D.2122); (3)taxesonproducts,exceptVATandimporttaxes(D.214).
b)othertaxesonproduction(D.29).
Taxesonproductsaredirectlyrelatedtothequantityorvalueofgoodsandservicesimported, produced or sold,whileothertaxesonproductionconsistofallothertaxesthatenterprisesincurasaresultofengaging inproduction.
Environmental taxesarefoundmainlyinthesub-categories D.2122‘taxesonimportsexcludingVATand importduties’, D.214‘taxesonproducts,except VATandimport taxes’andD.29‘othertaxesonproduction’. InESA95§4.23,taxesonpollutionresultingfromproduction activitiesareclassifiedasothertaxeson production.
Value added typetaxesareexcludedfromthedefinition(thereasonsforthisarediscussedthereafter).
Currenttaxesonincome,wealth,etc.aredefinedinESA95§ 4.77:
Currenttaxesonincome,wealth, etc.(D.5)coverallcompulsory,unrequitedpayments,incashorin kind,leviedperiodicallybygeneralgovernmentandbytherestoftheworldontheincomeand wealthofinstitutional units,andsomeperiodictaxeswhichareassessedneitherontheincomenor the wealth.
Currenttaxesonincome,wealth,etc.aredividedinto:
a)taxesonincome(D.51);
b)othercurrenttaxes(D.59).
AfewenvironmentaltaxesareclassifiedasD.59‘othercurrenttaxes’.Anexampleisthepartoftheannual taxonownershipofmotor vehiclesthatispaidbyhouseholds.Thepartofthistaxthatispaidbyenterprises is classified inD.29‘othertaxesonproduction’.
Theclassificationofenvironmentaltaxestonationalaccountscategorieswilldependontheprecisenatureof the taxes.
Table 1: Accounting classificationof environmental taxes
Typeoftax / AccountingclassificationEnergyproducts
Importorsalesofvehicles
Agriculturalinputs(fertiliser,pesticides)
Individualproducts(packagingmaterials,batteries, tyres,lubricantoils,CFCs,halons,etc.) / Taxesonproducts(D.21)
Measuredorestimatedemissionstoairorwater, wastewaterdischarges,waste
Annualvehicletaxes
Noise / Othertaxesonproduction(D.29)
whenpaidbyenterprises
Othercurrenttaxesonincome,wealthetc.(D.59)
whenpaidbyhouseholds
Source:LondonGroup(2001).
Other definitions of taxes, fees and charges
Thelegaldefinitionoftaxesmaydifferbetweencountries,andmayalsobedifferentfromthedefinitionused inthenationalaccounts.Bothdefinitionsarerelevantforenvironmental taxstatistics.Thelegaldefinitionof taxeshasaninfluenceonhow policymakerscanusethem asinstrumentsforenvironmentalprotection.The national accountsdefinitionimprovesinternationalcomparabilityofthestatistics,andallowsintegrationofthe taxdatawiththenationalaccountsandwithsystemsofintegrated environmentalandeconomic accounting. The environmentaltaxstatisticsframeworkusesthetaxdefinitionofthenationalaccounts,butcountriesmay choose todescribeenvironmentaltaxesfromboththelegalandthenationalaccountsperspective.
OECD(1999)givesthefollowingdefinitionoftaxes:
‘compulsory,unrequitedpaymentstogeneralgovernment.Taxesareunrequitedinthesensethat benefits providedbygovernmenttotaxpayersarenotnormallyinproportiontotheirpayments.’
ThisdefinitionisconsistentwiththedefinitionoftaxesintheEuropeanSystemofAccounts(ESA95– European Commission1996),seesection2.4below.
Thetermschargesandfeesareoftenusedinterchangeably.Asopposedtotaxes,theyareseenas payments foraservice,i.e.requitedpayments.TheOECDdefineschargesandfeesas:
‘compulsory, requited payments to either general government or to bodies outside general government, suchasforinstanceanenvironmentalfundorawatermanagementboard.’
Thetermlevyissometimesusedtocoverallkindsofcompulsorypayments.Taxesonproductsare sometimes calleddutiesorexciseduties.
The mainpointisthat taxesare compulsorypaymentstothe government,wherethebenefitsprovidedtothetaxpayerarenotdirectlylinkedtothepayment. Other compulsorypaymentstothegovernment wherethebenefitsaremoredirectlylinkedtothepaymentsare usually calledfeesorcharges.Inthenationalaccountstheyareseenaspaymentsforservices.[MO3]
Themainfocusofthestatisticalframework isontaxes,ratherthanchargesandfees.Therearesome borderlinecaseswhereitcanbedifficulttodecideifanenvironmentally relatedpaymenttogovernment shouldbeclassifiedasataxorafee.Inthiscase,thedefinitionusedinthenationalaccountsofthecountry in questionshouldbeusedfortheenvironmentaltaxstatisticsaswell.
Asageneralrule,apaymentshouldbeclassified asataxifnolinkbetweenthepaymentandtheservice renderedcanbeestablished.Thisisthecaseformanypollutiontaxes,forexample.Ifalinkbetween paymentandserviceexists,thetransactionshouldbetreatedasasaleofaservice,andclassifiedasafee (Eurostat 1999a).
Iftherevenuefromacompulsory payment,evenifrequited,ismuchhigherthanthecostsofprovidingthe service,it canbearguedthatit shouldbeseenasa tax.However,basedonthedatathatis usuallyavailable to statisticsproducers,itmaybedifficulttoestimatethesizeofthecost.
The System of National Accounts recognize the difficulties in differentiating between taxes and fees, charges.
In SNA 2008 (§ 7.80):
One of the regulatory functions of governments is to forbidthe ownership or use of certain goods or the pursuit ofcertain activities, unless specific permission is granted byissuing a licence or other certificate for which a fee isdemanded. If the issue of such licences involves little or nowork on the part of government, the licences being grantedautomatically on payment of the amounts due, it is likelythat they are simply a device to raise revenue, even thoughthe government may provide some kind of certificate, orauthorization, in return. However, if the government usesthe issue of licences to exercise some proper regulatoryfunction, for example, checking the competence, orqualifications, of the person concerned, checking theefficient and safe functioning of the equipment in question,or carrying out some other form of control that it wouldotherwise not be obliged to do, the payments made shouldbe treated as purchases of services from government ratherthan payments of taxes, unless the payments are clearly outof all proportion to the costs of providing the services.
The borderline between taxes and payments of fees for services rendered is not always clear-cut in practice. SNA (2008, § 8.64 c) reports:
Payments by persons or households for licences to ownor use vehicles, boats or aircraft and for licences forrecreational hunting, shooting or fishing are treated ascurrent taxes. Payments for all other kinds of licences(for example, driving or pilot’s licences, television orradio licences, firearm licences, etc.) or fees togovernment (for example, payments for passports,airport fees, court fees, etc.) are treated as purchases ofservices rendered by governments. The boundarybetween taxes and purchases of services is based on thepractices actually followed in the majority of countriesin their own accounts
Dataavailability forfeesandchargesisgenerallynotasgoodasfortaxes,partlybecausefeesareoften collectedbylocalgovernments. Inaddition,differencesintheorganisationofsomeactivitiescanmake comparabilityovertimeandbetweencountriesdifficultormeaningless.Anexampleiswasteandwaste watercollectionandtreatment,whichinmostEUcountriesistoavaryingextentagovernment activity financedbyfees(andsometaxes),buthasbeencompletely privatisedinsomeothercountries.Inmany countrieswheregovernment activitiesarestillimportantthereisacleartrendtowardsoutsourcing and privatisation.Forthesereasons,compiling statisticsonfeesandchargesismoredifficultthanfortaxes. Statisticsonfeesandchargesshouldbecomplementedbyinformationonpricedevelopmentsofe.g.waste andwastewaterservicesandwithdataonactivitiesundertakenbyprivatecompanies.Asanexample,figure
4 showsthedevelopmentinthepriceindicesforsewageandwastechargesinGermany.
Figure 4: Trend in charges for selected housing costs in Germany (oldLänder). Cost of living index for all private households, 1991 = 100.[MO4]
2.2 Definition of environmental taxes
Theenvironmental effectofataxcomesprimarilythroughtheimpactithasontherelativepricesof environmentallyrelatedproductsandactivities,incombinationwiththerelevantpriceelasticities(OECD
2000,p.8).Withthisinmind,thedefinitionofenvironmental taxesusedinthestatisticalframeworkputs emphasisonthepotentialeffectofagiventaxintermsofitsimpactoncostsandprices.Instead oftryingto elaborateaformaldefinitionofenvironmental taxes,itwasdecidedtofocusonthetaxbasesthathavea particularenvironmentalrelevance,andtoconsideralltaxesleviedonthesetaxbasesasenvironmental.
Insomecasesthetaxbaseisthemeasuredorestimatedamountofemissionsofapollutingsubstance, suchasNOx orSO2.However,itisoftendifficultandexpensivetomeasureemissionsdirectly,somany taxes arebasedonproxiesforemissions,forexampletheuseofpetrolorfueloil.
Thetaxbasewasseenastheonlyobjectivebasisforidentifyingenvironmental taxesforthepurposeof internationalcomparisons.Otherpossiblecriteria,suchasthe nameofthe tax, the purposestatedbythe tax legislatorortheearmarkingoftherevenueforenvironmental purposeshaveprovedtobedifficulttousein practice.Manytaxesareintroduced withseveralpurposesinmind,e.g.bothtoinfluencebehaviourby makinga productmoreexpensivetouseandtogeneraterevenue.Sincetheenvironmentalimpactofthetax comesmainlythroughitseffectonrelativeprices,ataxone.g.petrolintroduced forfiscalreasonswillhave the sameeffectasonethatisintroducedwiththestatedpurposeofreducingemissions.
Thestatisticalframeworkusesthefollowingdefinitionofanenvironmentaltax:
Ataxwhosetaxbaseisaphysicalunit(oraproxyofit)ofsomethingthathasaproven,specific negative impactontheenvironment.
Itwasdecidedtoincludealltaxesonenergyandtransportinthedefinitionofenvironmental taxes.
Basedonthedefinition above,itcanbearguedthattheterm‘environmentaltaxes’isnotagooddescription ofthetaxesinvolved,sinceitcanbeinterpretedasreferringtotaxeswithanenvironmental, ratherthana fiscal,motivation.Sincemotivationisnotpartofthedefinition,theterm‘environmentallyrelatedtaxes’is moreprecise,andthisispreferrede.g.bytheOECD.However,themoreconvenient term‘environmental taxes’is incommonuse,andwillbeusedintheseguidelines.
Itshouldbenotedthatalthough criterialikethenameandstatedpurpose ofataxarenotagoodbasisfor defining environmentaltaxes,theymaystillbeusefulforidentifyingpossibleenvironmentaltaxes.
Tosupplementthedefinitionofenvironmentaltaxesgivenabove,alistofenvironmentallyrelevanttaxbases wasagreedupon.Thefocusisonpollutionrelatedtaxbases,butinsomeapplicationstheuseorextraction ofnaturalresources,suchaswaterandminerals,is includedaswell.
ThemaincategoriesofenvironmentallyrelevanttaxbasesarelistedinTable 2,basedonOECD(1997).[MO5]
Table 2:Taxbasesincludedintheenvironmentaltaxstatisticsframework
Measuredor estimated emissions to air
- Measured or estimatedNOx emissions
- SO2 contentof fossil fuels
- Other measured or estimated emissions to air
Ozonedepleting substances (e.g. CFC orhalon) Measured or estimated effluents to water
- Measured or estimated effluents ofoxydizeable matters (BOD, COD)
- Other measured or estimated effluents to water
- Effluent collection and treatment, fixed annual taxes
Certainnon-point sources of water pollution
- Pesticides (Based on e.g. chemical content, price or volume)
- Artificial fertilisers (Based e.g. on phosphorus or nitrogen content or price)
- Manure
Wastemanagement
- Wastemanagementingeneral(e.g.collectionortreatmenttaxes)
- Waste management, individual products (e.g. packaging, beverage containers)
Noise(e.g. aircraft take-off and landings)
Energyproducts
- Energy products used for transport purposes
- Unleaded petrol
- Leaded petrol
- Diesel
- Other energy products for transport purposes (e.g. LPG or natural gas)
- Energy products used for stationary purposes
- Light fuel oil
- Heavy fuel oil
- Natural gas
- Coal
- Coke
- Biofuels
- Other fuels for stationary use
- Electricity consumption
- Electricity production
- District heat consumption
- District heat production
Transport
- Motor vehicles, one-off import or sales taxes
- Registration or use of motor vehicles, recurrent (e.g. yearly) taxes
Resources
- Waterabstraction
- Extraction of raw materials (except oil and gas)
-Otherresources(e.g.forests)
Therelationshipbetweentaxesandtaxbasesissometimesone-to-one,buttheremaybeseveraltaxeson one base.Onetaxcanalsobeleviedonseveraltaxbases.IntheNetherlandsforexample,therearethree different taxesleviedonthetaxbaseunleadedpetrol:thedutyonpetrol,thefueltaxpayableunderthe Environment ProtectionActandthetaxinconnectionwithpetroleumstocks.Thedutyonpetrolisleviedon twotaxbases:leadedandunleadedpetrol.
Valueaddedtax[MO6]
Valueaddedtypetaxes(VAT)areexcludedfromthedefinitionofenvironmentaltaxes.Thisismainly becauseofthespecialcharacteristics ofthistypeoftax.VATisataxleviedonallproducts(withfew exceptions),anditisdeductibleformanyproducers,butnotforhouseholds. Becauseofthis,itdoesnot influence relativepricesinthesamewaythatothertaxesonenvironmentallyrelatedtaxbasesdo.
Anotherreasonforexcluding VATfromthedefinition isthatrevenuedataforVATisoftennotavailableby product. Environment-related revenues would have to be estimated using information on VAT rates combinedwithestimatesof thetotalsalesof theproductsandtakingaccountof exemptionsanddeductibility oftheVAT.
However,VATratesmayvaryaccordingtoenvironmentalfactors.Asanexample,Austriaand Spainusedto havespecialhighVATratesonvehicles. Therateswerereducedtothestandard VATratefollowing EUtax harmonisation,andtherevenuelosswascompensated bythecreationofnewtaxesonvehiclesalesor registration,classifiedastransporttaxesintheenvironmental taxesframework.Thiscausesabreakinthe timeseriesfortransporttaxesinthesecountries.Fornationalpurposesitmay beconsideredtoestimatethe revenuefromsuchspecialVATrates(aswasdoneintheAustrianandSpanishcountrystudies,see Eurostat1999b). Figure1showsanestimateoftherevenue thatwasraisedbythehigherrateofVAT(12% higherthanthestandardVATrate)onmotorvehiclesinAustria fortheyears1980to1991,andtherevenue fromthestandard-consumptiontax(SCT)thatreplaceditfrom1992.ThenormalrateofVATwas18%until
1983and20%afterwards.
Figure 1:EstimatedrevenueraisedbythespecialVATonmotorvehiclesinAustria,million
ATS,1980 to 1992
AnotherissueisthatthetaxsystemmaybedesignedsothatVATisleviedonanenvironmental tax.One exampleisgiveninFigure1,whereVATisleviedonthestandard-consumption taxonvehiclesthatwas introducedin1992.AnotherexampleistheVATontransportfuels,whichisoftencalculated ontopofthe mineraloiltaxsothatthereisVATleviedonthemineraloiltax.Itcanbearguedthattherevenue fromthis kindofVAT-on-taxshouldbeincludedintheenvironmental taxestimates,butitisnotpartofthedefinition usedintheseguidelines. Thisismainlyforpracticalreasons,sincethistypeofrevenuecanbedifficultto estimate.
Specifictaxes[MO7]
The1994SERIEEmanual(EuropeanCommission 1994)definesacategoryoftaxescalledspecifictaxes. They are taxes whose revenues are earmarked for environmentalprotection purposes. To focus on earmarkedtaxesisusefulforanalysingthefundingmechanismsofenvironmentalactivities,forexample. Thedefinitionofspecifictaxesoverlapswith thedefinitionofenvironmentaltaxesbasedonthetaxbase,but theyarenotidentical.Some,butnotall,taxesonenvironmentally relatedtaxbasesareearmarkedfor environmentalprotectionpurposes,andearmarkedtaxes mayberelatedtoother taxbases thanthose used in thedefinitionofenvironmentaltaxes.
2.3 Delimitation of environmental taxes, fees, charges(system boundaries)
To be filled in by adding info on: environmental motive, difference between taxes and fees resource tax/resource rent
2.4Main categories of environmental taxes
Foranalyticalpurposes,theenvironmentaltaxescanbedividedintofourmaincategories:
Energytaxes(includingCO2-taxes)
Transporttaxes
Pollutiontaxes
Resourcetaxes(excludingtaxesonoilandgas)
[MO8]
Energytaxes
Thisgroupincludestaxesonenergyproductsusedforbothtransportandstationary purposes. Themost importantenergyproductsfortransportpurposes arepetrolanddiesel.Energyproductsforstationary use includefueloils,naturalgas,coalandelectricity.
TheCO2-taxesareincludedunder energytaxes rather than underpollutiontaxes.Thereareseveralreasonsforthis.Firstofall,itisoftennotpossibletoidentifyCO2- taxesseparatelyintaxstatistics,becausetheyareintegratedwithenergytaxes,e.gviadifferentiation of mineraloiltaxrates.Inaddition,theyarepartlyintroduced asasubstituteforotherenergytaxesandthe revenuefromthesetaxesisoftenlargecompared totherevenuefromthepollutiontaxes.Thismeansthat includingCO2-taxeswithpollutiontaxesratherthanenergytaxeswoulddistortinternationalcomparisons. If theyareidentifiable,CO2-taxesshouldbereportedasaseparatecategorynexttoenergytaxes.SO2-taxes may besubjecttothesameproblemasCO2-taxes.[MO9]
Transporttaxes
Thisgroupmainlyincludestaxesrelatedtotheownershipanduseofmotorvehicles.Taxesonother transportequipment(e.g.planes),andrelatedtransportservices(e.g.dutyoncharterorscheduledflights) arealsoincludedhere,whentheyconformtothegeneraldefinitionofenvironmental taxes.Thetransport taxesmaybe‘one-off’taxesrelatedtoimportsorsalesoftheequipmentorrecurrenttaxessuchasan annual roadtax.Taxesonpetrol,dieselandothertransportfuelsareincludedunderenergytaxes.
Pollutiontaxes
Thisgroupincludestaxesonmeasuredorestimatedemissiontoairandwater,managementofsolidwaste and noise.AnexceptionistheCO2-taxes[MO10], whichareincludedunderenergytaxesasdiscussedabove.
Resourcetaxes
Taxesonresourcesposesomeparticularproblems.Therearedifferences inopiniononwhetherresource extraction is environmentallyharmful in itself, although there is broad agreement that it can lead to environmental problems,suchaspollutionandsoilerosion.
Inaddition,taxesonextraction ofmineralsandpetroleum areoftendesignedtocapturetheresourcerent, anddonotinfluencepricesinthewaythatotherenvironmental taxes,e.g.producttaxes,do.Theresource rentcanbedefinedasthevalueofoutputlessallextractioncosts,including anormalreturntofixedcapital, andrepresentsakindof“pureprofit”fromextraction(seee.g.EuropeanCommission 2000a).Ataxonthe resourcerentdoesnotintroduce adifferencebetween thepricereceived bytheextractor andthepricepaid bytheusersinthewaythataproduct taxdoes,andthemarketpricewillbeaffected onlyifsupplyofthe productchangesbecauseofthetaxontheresourcerent.Forpetroleum andmineralswherepricesare determinedontheworldmarket,theeffectonpricesofataxontheresource rentinasinglecountryshould besmall.
Taxesonoilandgasextractionareexcludedfromthedefinitionofenvironmental taxes.Inadditiontothe argumentmentionedaboveaboutthetaxesbeingdesignedtocapturetheresourcerent,themainreasons toexcludethemare relatedtocomparabilitybetweencountriesand overtime.The revenuefromthesetaxes isimportantinonlyafewEU/OECD countries. Thetaxsystemsalsodifferbetweencountries, withdifferent combinationsofroyalties,exploitation fees,specialcorporatetaxratesanddirectgovernment ownershipof extractioncompanies.Thismeansthatincludingthesetaxesinthedefinitionwouldmakecomparisons of environmentalandresourcetaxrevenueverydifficult.Thetaxrevenuefromoilandgasisalsohighly volatile,reflectingfluctuations inthepricesofoilandgas.Thiswilldistortthetimeseriesofrevenuefrom resourcetaxes.Taxesonoilandgasextraction arediscussed inmoredetailinEuropean Commission (2000a), inparticularinsection5.2andAnnex3,basedonthesituationintheNetherlands.[MO11]
Therevenuefromresourcetaxes(excluding oilandgas)isonlyasmallshareofthetotalrevenuefrom environmentaltaxes.InEU-15in1997,thesharewasestimated tojust0.17%,seeEurostat(2000a).The resourcetaxbasesinEUcountriesincludewaterconsumption (Denmark,France),forestry(Sweden)and mining(France).[MO12]
RevenuesfromenvironmentaltaxesintheEU,bymaincategories
Fromarevenueperspective,energytaxesarethemostimportantenvironmentaltaxesforEUcountries.In
1997,theyaccountedformorethan77%ofthetotalrevenuefromenvironmentaltaxesinEU-15.Transport taxeswasthesecondlargestgroup,withashareofalmost19%.Pollutiontaxeshadarevenueshareof
3.7%,whileresourcetaxesaccountedforlessthan0.2%.(Source:Eurostat2000a).Environmental taxes accountedfor6.7%oftotalrevenuefromtaxesandsocialcontributionsinEU-15inthesameyear.Since
1980,theimportanceofenvironmental taxesintheEUtaxationsystemhasincreasedby0.9percentage points,presentingaratherslowbutregularupwardtrend.AsFigure2shows,theoverallincreasein revenueswasmostlyduetoincreasesinenergytaxation.
Figure 2:Revenuesfromenvironmentaltaxesinpercentoftotalrevenuesfromtaxesand social contributions, EU-15, 1980-1997
TheimportanceofenvironmentaltaxesvariessignificantlyacrossMemberstates(seeFigure3).In1997,the lowestcontributionsfrom environmentaltaxeswere observedinAustria(5.30%),Germany(5.33%),Belgium (5.49%),France(5.57%),Sweden(5.92%)andSpain(5.97%).ThehighestratioswereobservedinPortugal, Denmark,theNetherlands andGreece,allofthemhavingaratioabove9%.Ireland,ItalyandtheUnited Kingdomformedanothergroupofcountries witharelatively highcontributionofenvironmentaltaxestototal revenue fromtaxesandsocialcontributions,morethan8%.
Figure 3: Structure of revenues from environmental taxes in 1997 by MemberState, in percent of total revenues from taxes and social contributions
InalmostallEUcountries,astrongconcentrationofenvironmental taxesinthefieldofenergycanbe observed.TheNetherlands andDenmarkweretheonlyEUcountrieswhereenergytaxesgeneratedless than50%oftotalrevenuesfromenvironmental taxes.DenmarkwastheonlyEUcountrywhererevenues collectedthroughtransporttaxes wereclose tothose collectedviaenergytaxes, representingmore than4% ofthetotal revenuesfrom taxesandsocialcontributions.Significantcontributionsfrom transporttaxes(more than 3%)werealsoobservedinIrelandandtheNetherlands.
TheroleofpollutiontaxesismarginalinmostMemberStates.TheNetherlands,FranceandDenmarkwere theonlyEUcountrieswithanon-negligiblecontributionofpollutiontaxestotheirtotaltaxreceipts:1.76%,
0.7%and0.69%respectively. Thisisbecausethefinancingofwasteandwastewatertreatmentispartlyor fullyintegrated intothetaxationsystemsinthesecountries. InmostEUcountriesthefinancingofthese activitiesiseitherorganisedviafeesorthemanagement ofwasteandwastewaterislargelyorcompletely privatised.
[MO13]
ClassificationaccordingtoCEPA[MO14]
Theenvironmental taxescanalsobeclassifiedaccordingtotheClassificationofEnvironmental Protection ActivitiesandExpenditure (CEPA2000).TheCEPAisamulti-purpose classificationthatisusedin environmentalprotectionexpenditurestatisticsandaccountstoclassifyactivities,productsandtransactions. The1-digitlevelistheCEPAclasses.Fortheenvironmental taxes,CEPAclasses1to7,alsocalled environmental domains,aretherelevantones.
CEPA 2000 classes
1.Protectionofambientairandclimate
2.Wastewatermanagement
3.Wastemanagement
4.Protectionandremediationofsoil,groundwaterandsurfacewater
5.Noiseandvibrationamendment