The transport sector will bear much of the brunt of the 'green' tax regime because vehicles are responsible for 22% of the our CO2 emissions, warns Richard Watson, senior VAT partner at PricewaterhouseCoopers. Fleets could expect to be paying 71p a litre for petrol and 74p for diesel by 2002.
There was a question mark over whether the fuel duty escalator would actually reduce the number of car journeys and he had doubts on what effect the graduated vehicle excise duty, scheduled for autumn 1999, would have on car choice. 'It will only count when you change your car and you will not stop using it once you have bought it. I suspect it will have very little impact at all,' said Watson. Where a graduated VED could play a role, however, was in reinforcing the Government's message on which fuel it considered to be cleaner and in pushing manufacturers to develop cleaner technologies.