TaxCorporate TaxGreen tax gets yellow card

Green tax gets yellow card

Green taxes face an uncertain future after an MPs' inquiry found the £400m agency overseeing the landfill tax lacks accountability, transparency and regulatory bite.

There were no arrangements for evaluating either the success of the landfill tax credit scheme or the projects it funded, the Public Accounts Committee said.As a regulator, it may wield too little power and be too easily influenced by the waste disposal industry, the MPs concluded. Despite the sums involved, there were no arrangements for evaluating either the success of the scheme or the projects it funded.

Devised to encourage waste producers to recycle, the landfill tax was introduced in October 1996 as the UK’s first specific environment tax. It enabled landfill site operators to claim tax credits of up to 90% if they contribute to environmental projects. Tax collected in 2000-01 totalled £462m and tax credits £109m. More than £400m has been raised since tax credits began in 1996.

Edward Leigh, committee chairman, cited a ‘real dearth of information on what has been achieved’ by these projects, adding: ‘The lack of accountability needs to be addressed.’

The ‘complex and novel relationships between the private and public sector’ underlying the scheme had created opaque oversight arrangements, the report said.

MPs recommended one department should be given lead responsibility for the operation of the scheme, including value for money.

The Department for Environment, Food and Rural Affairs currently controls waste management strategy while Customs & Excise oversees the scheme’s regulation.

The MPs questioned the future of Entrust, the private sector company set up to regulate the scheme, querying its administration costs and lack of regulatory power. The report urged the government to address these issues in its review of the scheme.

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