Tax on diesel fuel

Press, Issue 32535, 19 February 1971, Page 8

Tax on diesel fuel

Sir,—When I learned that a surcharge on the price of petrol was to be levied to subsidise local bodies I did not think much of the idea. Only on reading this morning’s paper did I learn that people who heated their homes with diesel oil were E ' ;g to be similarly taxed. I cannot understand why a person who heats his home with diesel oil should be taxed for municipal purposes when the person who uses coal is exempt—and moreover, has a Government subsidy paid to the producer of his coal which keeps his fuel costs to manageable levels. This seems quite unjust and I cannot understand the Government in acting so unfairly. If there are administrative difficulties in differentiating, surely they can only be the same as those mentioned in the article people entitled to exemptions can apply to the local authority for recovery of the tax paid. This could be done by producing the oil company’s invoices at given periods. Yours, etc., H. E. RADLEY.

January 29, 1971. [The Minister of Interna) Affairs (Mr Seath) replies: “The Local Authorities (Petroleum Tax) Act is intended to provide local authorities with a source of revenue that will supplement land rating and help relieve the burden of financing local government, which until now has been borne by the ratepayei alone. Accordingly, local authorities, grouped into 21 local tax areas throughout the country, have been given permissive power by the act to impose a tax of up to 3c a gallon on petrol and 1.5 c a gallon on diesel. This is a commodity tax and is not re-

stricted to any one use, as is, for instance, the road tax on petrol and diesel. Home heating is only one of the purposes for which diesel may be used and the fact that other fuels such as coal, gas, and wood may also be used for home heating but are not being taxed for local authority purposes is not, therefore, a relevant point.”)