When you last bought petrol, 66.484 cents per litre was collected by the government as fuel excise (excluding GST). Motorists are charged GST on the petrol excise, which amounts to a tax on a tax. The AA has called for the GST to be removed - a move that would reduce prices by 10 cents per litre and help relieve the financial burden on New Zealanders.
The fuel excise portion includes:
- 59.524 cents - National Land Transport Fund
- 6 cents - ACC Motor Vehicle Account
- 0.66 cents - Local Authorities Fuel Tax
- 0.3 cents - Petroleum or Engine Fuels Monitoring Levy
In addition, GST is collected on the overall price of fuel including excise. The GST on excise amounts to a 10 cents per litre "tax on taxes".
There are no taxes on diesel other than GST. Instead, diesel vehicles pay Road User Charges. All fuels also pay an Emissions Trading Scheme levy (approximately 2.5 cents per litre).
It is now government policy for all of the petrol excise tax motorists pay to be directed to the National Land Transport Fund for investment back into New Zealand's road and transport system. The AA lobbied hard on behalf of motorists for many years to have all the taxes devoted to road building and maintenance, road safety education and enforcement, and subsidies for public transport.
Previously, about 19 cents per litre of the tax motorists paid on petrol was diverted by the government to non-road and transport related projects.
AA speaking up for motorists
The AA welcomed the decision to pledge all excise tax to the National Land Transport Programme from July 2008. For far too long there has been significant under-investment in the nation's road and transport network, and tax diversion has been unfair and at the expense of motorists.
Motorists must not be selectively taxed or treated as an easy source of tax revenue to pay for projects that would be more fairly funded by other sources such as rates or general taxation.
Regional petrol levies (or "green taxes")
We don't support regional petrol levies that unfairly target motorists to subsidise the transport decisions of others. The future funding of public transport must not be another tax on motorists added to current taxes and charges, but has to be independently justified in terms of defined benefits to motorists.