TWO new OECD reports - taxing energy use and Inventory of Estimated Budgetary
Support and Tax Expenditure for Fossil Fuels 2013 - provide wide-ranging
evidence of how reforming subsidies and tax breaks for fossil fuels and
rationalizing fuel taxes can help countries boost finances and meet green
objectives.
Taxing Energy Use provides the first systematic, comparative analysis of
the structure and level of energy taxes in the 34 OECD member countries. It sets
out how tax rates vary between different types of fuel and different uses of
fuel for each country calculating what statutory tax rates on these diverse
fuels imply in terms of taxation per unit of energy and per unit of carbon
dioxide emissions. It shows the wide variations in these effective tax rates
across countries, and details how rates also vary widely between different types
of fuel even when they are used for similar purposes. On average, the effective
tax rate in terms of carbon emissions on diesel for road use is 37% lower than
the comparable rate on gasoline; the rate in terms of energy content is 32%
lower. In heating and industrial uses, the average effective tax rate in carbon
terms on oil products is EUR24 per tonne of CO2, compared with EUR13 per tonne
for natural gas; the average rate on coal is only EUR5 per tonne, despite its
significant negative environmental impacts. Fuel used in agriculture, fishing
and forestry is often exempt from tax.
The
Inventory Of Estimated Budgetary Support and Tax Expenditure for Fossil Fuels
2013 collects details on more than 550 fossil fuel support measures in the 34
OECD member countries, including many provided by state and provincial
governments. The report also highlights progress made and the benefits
identified by a number of OECD countries in reforming support to fossil fuels in
recent years.
Governments support fossil-fuel production through market intervention,
direct transfers of funds, undercharging of government-supplied goods or assets
and tax concessions. Consumption of fossil fuels is supported by mechanisms
including price controls, rebate schemes and tax relief. As tax treatment varies
considerably across countries, the value of this support, which includes tax
expenditures, is not internationally comparable.
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