Reforming the Tax System to Promote Environmental Objectives: An Application to Mauritius

June 1, 2011

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Fiscal instruments are potentially among the most effective, and cost-effective, options for addressing externalities related to poor air quality, urban road congestion, and greenhouse gases. This paper takes a case study, focused on Mauritius (a pioneer in the use of green taxes) to illustrate how existing taxes, especially on fuels and vehicles, could be reformed to better address these externalities. We discuss, in particular, an explicit carbon tax; a variety of options for reforming vehicle taxes to meet environmental, equity, and revenue objectives; and a progressive transition to usage-based vehicle taxes to address congestion

Subject: Environment, Excises, Expenditure, Fuel tax, Greenhouse gas emissions, Public expenditure review, Taxes, Vehicle taxes

Keywords: congestion, E. vehicle ownership tax, Excises, Fuel tax, Global, global warming, green tax, green taxes, Greenhouse gas emissions, ownership tax, percentage tax, price rise, proportional tax, Public expenditure review, reform option, tax design, tax rate, tax saving, tax system, vehicle exemption, vehicle price rise, vehicle tax, vehicle taxes, vehicle use, WP

Pages:
39
Volume:
2011
DOI:
https://doi.org/10.5089/9781455263417.001
Issue:
124
Series:
Working Paper No. 2011/124
Stock No:
WPIEA2011124
ISBN:
9781455263417
ISSN:
1018-5941

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