PETROL SUBSTITUTES

Hawke's Bay Tribune, Volume XXIII, Issue 73, 8 March 1933, Page 8

PETROL SUBSTITUTES

TAX ON VEHICLES USING KEROSENE

MILEAGE BASIS LEVY.

PROPOSAL IN FINANCE BILL

Wellington, March 7A proposal to tax road vehicles which are not using motor spirits on a mileage basis with approximately the equivalent of the petrol tax, is contained in the Finance Bill (No. 4). The principal vehicles affected are those using kerosene or heavy oil as fuel, those deriving power from steam, and electricallydriven motor vehicles, including trackless trolley omnibuses. It was explained by the Rt. Hon. J. Q. Coates that the special taxation of motor spirits, including surtax, amounted to 101 <1 per gallon, and of this 6d was credited to the Main Highways, Revenue Account, tho remaining 4Jd going to the Consolidated Fund. At present vehicles using fuel or power for propulsion other than motor spirits did not pay this tax. “Taking an ordinary two or three-ton pay-load motor truck doing 10 miles to the gallon, it would pay one penny per vehicle mile,” said Mr Coates,” and on an annual mileage of 20,000 it would pay over £B3 a year in special motor taxation. It is stated that there are at present 37 commercial vehicles operating in Auckland not paying the petrol tax, and the revenue from these vehicles would amount to from £3OOO to £4OOO a year. USE OF NUN-TAXABLE FUEL. “At a very small cost ordinary motor vehicles can be converted into vehicles deriving power from non-taxablc fuel, and unless some steps are taken it is obvious that revenue from the motorspirits tax will be seriously affected. “It is estimated that a mileage tax will produce about £20,000 for the forthcoming year. However, it is the potential loss of revenue that is mainly responsible for the present legislation.

The Minister said that the necessity for the legislation was increased in view of the recent rise in the petrol tax, and if some steps were not taken to ensure that, this class of vehicle was placed in a similar position to a petrol-driven vehicle the tendency would bo for owners to have their vehicles adapted to the use of other forms of fuel to evade taxation. The practice of using crude oil, benzine and power kerosene, as well as some other substitutions for pure spirits, was growing. It was difficult to define just what vehicles would be subject to the tax, as verying proportions of motor spirits might be usel in conjunction with other forms of propulsion, However, if it were later ascertained that the legislation was inequitable, adjustments could be made next session. SCALE OF TAXATION. The bill provides that every owner of motor vehicles affected shall lodge before the seventh day of each month, beginning in April next, a declaration showing the total number of miles of public highway ever which the vehicle was used during the preceding month. The following scale of taxation is provided:—Heavy motor vehicles (class A), per 100 miles 5/-; class B, 5/3; class C, 6/-; class D, 6/9; class E 7/3; Class F, 7/6; class G, 8/3; class H, 9/-; class I, 9/6; class J, 9/6; class K, 10/3; class L, 10/9; class M, 11/6; class N 12/-; class O, 12/9; classes P and Q, 13/6; other motor vehicles, 4/9. To each of these amounts will be added an additional 10 per cent, of the prescribed rate for every 10 miles or fraction thereof by which the total distance exceeds a multiple of 100 miles. If in any month a •vehicle is used over less than ICO miles, the tax payable shall for each complete mile over which the vehicle is used be at the rate of a l-100th part of the appropriate amount for the complete 100 miles. The amount of the tax ascertained by the above computation shall (a) be reduced by 20 per cent, if the motor vehicle uses electricity as its main motive power; and (b) be reduced or increased proportionately to every increase or decrease in Customs duty (exclusive of primage duty or surtax) imposed on motor spirits at the date of the passing of the bill. ADMINISTRATIVE COSTS. Five per cent, of the amount collected will be paid into the Post Office Account for administration expenses, and the balance will be divided between the Main Highways Fund and the Con solidated Fund in the same proportion as the petrol tax is now divided. Failure to comply with the require ments of the bill or the making of false declarations renders the owner liable on summary conviction to a fine of £lOO. A lurther clause m the bill clarifies the existing legislation and makes it impossible tor a refund of motor-spirits taxation to be made in respect of vehicles carrying demonstration registration plates. The bill also provides for the retention in the Consolidated Fund of an amount not exceeding £500.000 of motor-spirits taxation revenue which would otherwise have gone to the Main Highways Fund. Mr Coates explained that this amount would be retained for a further year, thus benefiting the general finances.