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Farmers welcome sane decision on diesel tax

12 August 2009

Farmers welcome sane decision on diesel tax

Federated Farmers is celebrating the National-led Government’s decision to abandon a new tax on diesel. Any diesel tax would have required a refund system for off-road use. This would have added a major compliance burden on the agricultural sector.

“As the only group to have stood up for Road User Charges (RUC), it’s pleasing to have a Government which has listened,” says Donald Aubrey, Federated Farmers transport spokesperson.

“Although no one likes taxes, they need to be efficient and fair to collect. A diesel tax failed on both counts.

“36 percent of all diesel is used off-road and in the agricultural sector, that figure skyrockets to 91 percent. A diesel tax would have needed a complicated refund system and that would have been reflected in the price of diesel at the pumps.

“Inland Revenue was asked to look at including a rebate system within GST. It concluded that this would have added too much complexity and opposed the measure.

“Taxes on fuel are blunt instruments that do not reflect the real price of road use.

“RUC’s represent a simpler and fairer means to price road use. While it’s a manual system at the moment, inconvenience will be reduced through on-line sales.

“When the technology becomes viable, Federated Farmers supports electronic road pricing as a long term replacement for both the RUC and fuel excise taxes,” Mr Aubrey concluded.

ENDS

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