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

Author/Editor: Ian W.H. Parry
Publication Date: June 01, 2011
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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
Series: Working Paper No. 11/124
Subject(s): Climatic changes | Energy taxes | Environmental policy | Greenhouse gas emissions | Mauritius | Tax reforms | Tax systems | Taxation

Author's Keyword(s): Mauritius | green taxes | global warming | congestion | vehicle taxes.
Publication Date: June 01, 2011
ISBN/ISSN: 9781455263417/1018-5941 Format: Paper
Stock No: WPIEA2011124 Pages: 39
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