Environmental Economic Accounts: Environmental Taxes

Transcription

1 Environmental Economic Accounts: Environmental Taxes European Statistical Training Programme (ESTP): Environmental taxes and subsidies Luxembourg, April 2017 Julie L. Hass, Ph.D. THE CONTRACTOR IS ACTING UNDER A FRAMEWORK CONTRACT CONCLUDED WITH THE COMMISSION

2 Outline Part 1. DPSIR Framework Part 2. Response: Environmental Taxes Part 3. Five steps in developing statistics on Environmental Taxes including indicators and what they tell us Part 4. Quality Reports 2

3 Part 1. DPSIR Framework Drivers Pressure State Impact Response 3

4 DPSIR Framework To structure thinking about the interplay between the environment and socio-economic activities Source: EEA ( 4

5 DPSIR uses a systems analysis view: Social and economic developments (drivers) exert pressure on the environment and, as a consequence, the state of the environment changes. This leads to impacts on e.g. human health, ecosystems and materials that may elicit a societal response that feeds back on the driving forces, on the pressures or on the state or impacts directly, through adaptation or curative action. doc101182) 5 Source: EEA (

6 Policy Responses: Government policy tools include: Taxes Fees/charges Deposit schemes (for example, for bottles, cars) Voluntary agreements often to avoid imposing a tax Emissions trading systems (SO 2 and CO 2 ) Subsidies 6

7 Part 2. Response: Environmental Taxes 7

8 Taxes in the national accounts Definition of Taxes from 2008 SNA ( 8.10) «Taxes are compulsory, unrequited payments, in cash or in kind, made by institutional units to government units.» Categories of taxes in SNA: Taxes on Products Other taxes on production Taxes on income Other current taxes Capital taxes 8

9 Definition and categories of Environmental Taxes Definition: An environmental tax is a tax whose tax base is a physical unit (or a proxy of it) of something that has a proven, specific, negative impact on the environment. (SEEA-CF 2012, 4.150) Categories: 1. Energy 2. Transport 3. Pollution 4. Resources 9

10 Categories of environmental taxes (SEEA-CF 2012, a. Energy Taxes Taxes on energy products used for both transport and stationary purposes Taxes on carbon and sulphur are included under «energy taxes» rather than pollution taxes. b. Transport Taxes Mainly taxes related to the ownership and use of motor vehicles, plus taxes on other types of transport (planes) and transport services, road taxes are also included. 10

11 Categories of environmental taxes (SEEA-CF 2012, 4.155) c. Pollution Taxes Taxes on measured or estimated emissions to air and water, and generation of solid waste d. Resource Taxes Taxes on water extraction, extraction of raw materials and other resources (e.g. sand and gravel) 11

12 Part 3. Developing statistics on Environmental Taxes: 5 Steps 1. Identify environmental taxes and establish a list of environmental taxes. 2. Classify the environmental taxes into the 4 categories of environmental taxes. 3. Collect revenue data on these taxes 4. Allocate the revenue data to the environmental tax categories. 5. Allocate the revenues to the economic activities paying the taxes. 12

13 Step 1. National Tax List Obtain your national tax list from the Ministry of Finance or other source with as detailed a description as possible for each of the taxes on the list. Check with the national accounts to make sure that the list does not exclude items that are defined as «taxes» in the national accounts or include items that are NOT defined as «taxes» in the national accounts which are for example, «fees». 13

14 national tax list xls 14

15 Step 2. Evaluate and classify Evaluate the different tax descriptions to determine if the tax bases are/are not included in the definition of «Environmental Taxes» Sort/classify each tax that is defined as an environmental tax into one of the 4 environmental tax categories (energy, transport, pollution, resource) 15

16 Let s try this on a country s NTL Exercise 1! Choose one of the 7 countries NTL do your own In column L (orange highlights) enter a code for the type of environmental tax (T - Transport tax, E - Energy tax, P - pollution tax, RS - resource tax) if it is an environmental tax! Use 15 minutes and see how far you can get! 16

17 List from Norway (1 of 8) Energy products (including fuel for transport) Energy products for transport purposes Unleaded petrol Leaded petrol Diesel Other energy products for transport purposes (e.g. LPG or natural gas) 17

18 List from Norway (2 of 8) Energy products for stationary purposes Light fuel oil Heavy fuel oil Natural gas Coal Coke Biofuels Electricity consumption and production District heat consumption and production Other energy products for stationary use 18

19 List from Norway (3 of 8) Greenhouse gases Carbon content of fuels Emissions of greenhouse gases (including proceeds from emission permits recorded as taxes in the national account) 19

20 List from Norway (4 of 8) Transport (excluding fuel for transport) Motor vehicles import or sale (one off taxes) Registration or use of motor vehicles, recurrent (e.g. yearly taxes) Road use (e.g. motorway taxes) Congestion charges and city tolls (if taxes in national accounts) Other means of transport (ships, airplanes, railways, etc.) Flights and flight tickets Vehicle insurance (excludes general insurance taxes) 20

21 List from Norway (5 of 8) Pollution - 1 Measured or estimated NOx emissions Measured or estimated SOx emissions Measured or estimated Sulphur emissions Other measured or estimated emissions to air (excluding CO 2 ) Ozone depleting substances (e.g. CFCs or halons) 21

22 List from Norway (6 of 8) Pollution - 2 Measured or estimated effluents to water Measured or estimated effluents of oxidizable matter (BOD, COD) Other measured or estimated effluents to water Effluent collection and treatment, fixed annual taxes Non-point sources of water pollution Pesticides (based on e.g. chemical content, price or volume) Artificial fertilizers (based on e.g. phosphorus or nitrogen content or price) Manure 22

23 List from Norway (7 of 8) Pollution - 3 Waste management Collection, treatment or disposal Individual products (e.g. packaging, beverage containers, batteries, tires, lubricants) Noise (e.g. aircraft take-off and landings) 23

24 List from Norway (8 of 8) Resources Water abstraction Harvesting of biological resources (e.g. timber, hunted and fished species) Extraction of raw materials (e.g. minerals, oil and gas) Landscape changes and cutting of trees 24

25 OECD information another set of information NV_ENVPOLICY# 25

26 Questions? 26

27 A closer look at some of the more challenging bits What is in? and out? Or if there is no «national tax list» 27

28 Sales of Goods and Services What s OUT Payments for the provision of government services such as waste and wastewater treatment are considered «fees» NOT taxes since the purchaser has received a service from the government in return for the payment. 28

29 Fines and penalties What s OUT - Fines and penalties are compulsory payments imposed on institutions by courts of law or quasijudicial bodies (2008 SNA 8.135) - These are not treated as taxes but as miscellaneous current transfers. 29

30 Resource Rent and Leases What s OUT - Payments of rent are commonly called Royalties. - Rent is a payment due in one accounting period, leases are longer term. 30

31 SNA boundary vs national territory Adjusting for residence principle Resident units in national territory + resident units in RoW Foreign units on national territory 31

32 Difference between SNA boundary and territory boundary (Main difference is usually international transport) Residents Non-Residents National Territory X X Examples: Emissions Inventory, Energy balances Rest of World X SNA: GDP Add these! Subtract these! 32

33 Emissions Trading What s IN Emissions Trading Schemes (SEEA-CF 2012, ) Defined as a «tax» in the National Accounts - For carbon dioxide emissions: energy taxes - For other types of emissions: pollution taxes 33

34 How does this work? ISWGNA guidance: The payments for emission permits, issued by governments under cap and trade schemes, should be recorded at the time the emissions occur as taxes, specifically other taxes on production (D29), on an accrual basis. 34

35 Emissions permits are a Pre-paid tax The timing difference between the payments received by government for the permits and the time the emission occurs gives rise to a financial liability (accounts payable) for government and a financial asset (accounts receivable) for the holder. The difference between the pre-paid tax value of the permit and the market value of the permit represents a marketable contract (non-produced nonfinancial asset) for the holder. 35

36 Resources for ETS SNA News and Notes En.pdf MGDD - chapter VI.5 on emission trading allowances Env Taxes manual: Section

37 Norway s ETS methodology Only include purchases of emission permits by resident units Starting point is all of the quotas that are handed in by enterprises in the period. For each enterprise (Number of quotas handed in) (Free quotas given by government) = (number of quotas purchased) 37

38 Norway s ETS methodology cont. For units that have received more quotas than are needed to cover emissions, number of purchased quotas = 0 (Number of purchased permits) * (weighted average market price from the international exchange, InterContinental Exchange (ICE)) = TOTAL AMOUNT PAID FOR QUOTAS 38

39 Questions? 39

40 Step 3. Obtain revenue figures Obtain revenue figures for each of the different taxes as well as a figure for total tax revenues. Figures can be from National Accounts or Government Finance Statistics or Ministry of Finance 40

41 Adjustments Time adjusted cash (TAC) method used for taxes paid with a regular time lag. Taxes paid irregularly or once or twice a year, but before end of current year are recorded in cash basis. If initial data sources are national accounts or are adjusted to match NTL, then no further adjustments needed. 41

42 Step 4. Allocate revenue to environmental tax categories Total Environmental Taxes in Sweden, , current prices, SEK million *Preliminary data Source: SCB 42

43 Exercise 2 on aggregating Using the national tax list that you worked on before. Aggregate the taxes into the 4 different categories for environmental taxes for 1 year. 43

44 Indicators what do they tell us? Typically the indicators calculated include: Ratio of Total Environmental Taxes to GDP Ratio of Total Environmental Taxes to total taxes and social contributions 44

45 Total Environmental Taxes in Sweden, , current prices, SEK million *Preliminary data Source: SCB 45

46 Green taxes / total taxes & contrib provide information about greening Efforts to «green» the taxation policies include Shifting taxation from labour to consumption Increasing the share of revenues But if the ratio is increasing it is not always showing «good» developments. 46

47 Percent of GDP shows Burden on the economy In Sweden per cent of GDP 47

48 Percent Environmental tax revenues as share of total tax revenues & relative to GDP 2013 Source: 48

49 Questions? 49

50 Before going to Step 5, Examine Reporting Requirements Regulation (EU) No 691/2011 of the European Parliament and of the Council of 6 July 2011 on European environmental economics accounts. Deadline:30 September Annual at T-1.75 Questionnaire Quality Report 50

51 Questionnaire reporting requirements and format Methodology page of Environmental Accounts: Environmental Taxes Manual: Questionnaire: y+economic+activities+questionnaire 51

52 Report: Energy Taxes 3 tables 1. NACE Rev.2, A64 + HH + Non-resident + not allocated S96 T 97 - T 98 U 99 h n_r n_a Other personal service activities Activities of households as employers; undifferentiated goods- and services-producing activities of households for own use Activities of extraterritorial organisations and bodies Households Non-residents Not allocated Total energy taxes Total energy taxes from the NTL (for comparison and check) % diff. between total energy taxes and total energy taxes from the NTL Environmental taxes for national purposes (difference between total reported above and total published for national purposes) Other environmentally related payments to government (fees and charges) 2. NACE Rev. 2, A9 (1-letter) only not HH, non-residents 3. CO 2 Taxes (including emission trading schemes ETS) 52

53 Report 2 tables each for Transport taxes Pollution taxes Resource taxes NACE Rev 2 A64 NACE Rev 2 A9 Table with A9 is auto-calculated and excludes Households, Non-residents, and Not allocated 53

54 Questions? 54

55 Now that we know the reporting requirements here comes the challenging part! 55

56 Step 5. Allocate revenues to the economic activities (NACE/ISIC) that pay the taxes Needs to be done for EACH tax! May need a different distribution key for each different tax! The aggregate to the 4 tax categories. 56

57 How to develop a distribution key Take a total and assign it to various categories What percent or fraction does each category have? 57

58 You have total revenues by tax how do you assign to the different NACE? Not just one key need to develop for EACH tax Exempt? then portion of whole = 0 Only 1 industry or only HHs = 100% Tax on products used SUTs - if you can find that specific product, or know which industries use it Tax on production then only industries that produce Energy Accounts, vehicle registers, fuel purchases, VAT registers, +++ BE CREATIVE! 58

59 Example 1. Perchloroethylene New tax on perchloroethylene Used in dry cleaning of clothes Find the appropriate ISIC/NACE category ISIC Rev 4/NACE Rev 2: Washing and (dry-) cleaning of textile and fur products 59

60 Example 2. Gasoline Tax on gasoline used in automobiles Tax is collected by the gasoline stations who then pay it to the government Are they assigned to ISIC/NACE 47.30? No! Assign to those who purchased the fuel and used it! Vehicle register ownership but not use SUTs, energy accounts (not balance!) 60

61 Example of Country website Netherlands EN&PA=82725eng&D1=0-19&D2=0-1,59-60&D3=(l-2)-l&LA=EN&VW=T NOTE: Taxes and Fees (national use fees are not taxes) Non-residents in the Netherlands (adjustment) 61

62 Exercises 62

63 Quality Reports Relevance Accuracy Timeliness and punctuality Accessibility and clarity Comparability and coherence Explain how compiled 63

64 Quality Reports Most challenging is the last section where you need to explain the methodology. Which means the distribution methodology for each of the taxes. 64

65 Questions? 65

66 Thank you for your attention! contact: Julie L. Hass, Ph.D. Independent Consultant 66