12 August 2009
Farmers welcome sane decision on diesel tax
Federated Farmers is celebrating the National-led Government’s decision to abandon a new tax on diesel. Any diesel tax
would have required a refund system for off-road use. This would have added a major compliance burden on the
“As the only group to have stood up for Road User Charges (RUC), it’s pleasing to have a Government which has listened,”
says Donald Aubrey, Federated Farmers transport spokesperson.
“Although no one likes taxes, they need to be efficient and fair to collect. A diesel tax failed on both counts.
“36 percent of all diesel is used off-road and in the agricultural sector, that figure skyrockets to 91 percent. A
diesel tax would have needed a complicated refund system and that would have been reflected in the price of diesel at
“Inland Revenue was asked to look at including a rebate system within GST. It concluded that this would have added too
much complexity and opposed the measure.
“Taxes on fuel are blunt instruments that do not reflect the real price of road use.
“RUC’s represent a simpler and fairer means to price road use. While it’s a manual system at the moment, inconvenience
will be reduced through on-line sales.
“When the technology becomes viable, Federated Farmers supports electronic road pricing as a long term replacement for
both the RUC and fuel excise taxes,” Mr Aubrey concluded.