TAXATION ON CARS

Sun (Auckland), Volume 1, Issue 12, 5 April 1927, Page 10

TAXATION ON CARS

FLAT RATE V. PETROL FUEL METHOD REVIVED Sooner or later the question of taxation on motor vehicles will again be revived in New Zealand. The leading motor organisations of the world are almost unanimously in favour of the petrol but difficulties concerning the use of petrol by non-road use has so far proved one of the greatest arguments against the petrol tax. As yet the car taxation in New Zealand is too small to cause any serious injustice, but the indications are that an endeavour will be made to increase taxation, and the flat rate-tyre-petrol controversy is bound to be revived. In this connection the position in England is of interest, and more information will shortly be available. Government departments and the huge motoring organisations have made exhaustive inquiries, and the petrol tax appears to have a fair chance of replacing the present flat rate tax which is a heavy tax quite unjust in its action. Concerning the matter the political correspondent of the London “Mail” stated early in February: “When Mr. Churchill, who returns to London soon, settles down to detailed consideration of the next Budget proposals, the oft-discussed possibility of reverting to a tax on fuel instead of the present tax on a horse-power basis for motor vehicles will come to the fore. “A formula for the fuel tax was found by the Ministry of Transport and the Treasury working conjointly a year ago. This marked a considerable advance, since great difficulty had been experienced in so defining a motor fuel as to prevent tax evasion by the v~a of petrol substitutes, yet avoiding taxation of fuel used for purposes other than propelling of motor vehicles. “It is almost certain that the new basis of taxation would have been adopted last year but for the fact that it would have thrown a heavy extra burden on lorries and other commercial vehicles at the very moment (the -eneral strike was impending) when the State expected to be most in need of their services and the good-will of their owners. “The Treasury, I gather, remains convinced that the fuel tax is the fairest method of collecting contributions towards road maintenance, since it bears a direct relationship to the use made of the road.”