The Institute for Fiscal Studies (IFS) branded UK motoring and alcohol taxes \u201ca mess\u201d this week, claiming that the taxes were responsible for a shrinking share of receipts.<\/p>\n
The independent think-tank said there was \u201ca clear case for (the) reform\u201d of driving and alcohol duties, arguing that both were poorly targeted at congestion and problem drinking respectively.<\/p>\n
Fuel, alcohol and tobacco duties saw a 7.2% increase in receipts in 2014-15. However, the duties have dropped from 10.3% of receipts in 1978-79, and are predicted to fall a further 6% by 2020-21.<\/p>\n
IFS critics claim that if their share had stayed at 1978-79 levels, they would raise an extra \u00a326 billion per year.<\/p>\n
Furthermore, \u201cPetrol and diesel duty increases of 41% and 31% respectively would return the average cost of driving a new vehicle to its 1997 level and raise \u00a39bn a year,\u201d IFS spokesperson, Kate Smith, said.<\/p>\n
The IFS also cast doubt on the Office for Budget Responsibility\u2019s assumptions that fuel duties would rise in line with inflation.<\/p>\n
\u201cSince 2011 all the increases that had been pencilled in have been cancelled,\u201d Ms Smith said.<\/p>\n
Ms Smith argued that fuel duty was relatively well targeted at air pollution and climate change, but poorly targeted at congestion \u2013 particularly in a world where increased fuel efficiency is reducing the cost of driving. Ms Smith suggested that a system of road pricing would incentivise motorists to drive at quieter times and on less congested routes.<\/p>\n","protected":false},"excerpt":{"rendered":"
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