carbon tax

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Dog tax was imposed under Act No 9 of 1848. Accordingly, the citizens had to pay taxes for domestic dogs as well as for the stray dogs which used to stay in and around the houses. The dogs which had no owners would be drowned and killed. Buddhist society who regarded killing as a sin hated this.  Dog tax was one of the reasons for the uprising in 1848. Veranda tax in accordance with the floor area and coconut tree tax were similar in nature to this. Every adult had to pay the body tax.

Carbon tax of the present times is similar in nature. It is imposed in accordance with the vehicle cylinder capacity and the period from the date of manufacture.

Vehicle type Usage Tax per cm3
Petrol / Diesel Hybrid Less than 5 years
Between 5 – 10 years
More than 10 years
25 cents
50 cents
Rs. 1
Petrol / Diesel normal Less than 5 years
Between 5 – 10 years
More than 10 years
50 cents
Rs. 1
Rs. 1.50
Passenger transport buses
Less than 5 years
Between 5 – 10 years
More than 10 years
No relevance to cm3
Rs. 1000
Rs. 2000
Rsරු. 3000

Accordingly, tax per average 800 cc ALTO motor car is Rs. 400/= per annum, after five years Rs. 800/= and after ten years is Rs 1,200/=. This tax is applicable in addition to current levies. This is also apart from expenses for emission test, compulsory to obtain revenue license. Government has imposed taxes for emission test too.

A 100 cc new motorcycle owner has to pay Rs. 50 as carbon tax.

What is the use of this tax? Is it used to plant trees to absorb carbon dioxide or to reduce the environmental pollution?  Otherwise, is this tax income used to import super luxury vehicles for the politicians and public officials?

These taxes are regarded as pigouvian tax. A Pigouvian tax is a government cost on activities that create socially harmful externalities. An externality is an activity that creates a negative effect on others. Their aim is to make provisions for the expenses that are harmful to the society. Fossil fuel is harmful to the society. It emits carbon dioxide to the air, which increases the global temperature.

Government of Sri Lanka introduces the carbon tax in order to maintain the government expenses by any means.  Therefore, this levy equals to dog tax in the colonial period.

Translated by Rajendra Wijesinghe

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