A foundation of modern democratic societies is that the laws introduced by governments should be clearly defined and understood by the community which must abide by them. Taxation laws are no different.
Governments have an obligation to articulate not only a taxpayer's obligations under the law but also why taxation has been imposed.
Underlying the legal and administrative processes of the law itself should be an understanding of the policy objectives the law has been imposed to achieve.
Articulating and clarifying the objectives of fuel taxation in Australia is the basis of the Inquiry's report and recommendations.
A number of recent developments have made this focus imperative:
Based on the submissions received and consultations held, the Inquiry stresses this last point. It is accentuated by the fact that, to most people, buying fuel is something of a `grudge purchase'. It is not relished, in the way that expenditure on new clothes or a visit to a restaurant may be. For the most part, the tax component on fuel is resented. These views are reinforced when governments are not clear in explaining why fuel is taxed.
Only by first clarifying what fuel taxation arrangements are supposed to achieve could the Inquiry identify their adverse effects on resource allocation, pricing and marketing arrangements, and administration.
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