GREEN TAX

GREEN TAX

Subject: Environment

Context: Green tax mooted for personal vehicles older than 15 years.

Concept:

• Personal vehicles will be charged a tax at the time of renewal of Registration Certification after 15 years.
• The levy may differ depending on fuel (petrol/diesel) and type of vehicle. The proposal will now go to the States for consultation before it is formally notified.
• It includes 10-25% of road tax on transport vehicles older than eight years at the time of renewal of fitness certificate.
• The proposal on green tax also includes steeper penalty of up to 50% of road tax for older vehicles registered in some of the highly polluted cities in the country.
• The policy will come into effect from April 1, 2022.

Green Tax

• Green tax is also called as pollution tax or environmental tax and is the tax levied on all the goods that cause environmental pollution. It is believed that charging tax on emissions will help bring about changes in firms and households.
• Green tax is an environmental tax that aims at ensuring that polluters are duly punished for the activities that deter the environment by charging them a penalty for the harm caused to others.
• Charging direct taxes to perpetrators on emissions is an economical means to provide them with an incentive to lower their pollution to the extent where further reduction could potentially turn out to be more expensive than paying the tax itself.