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The Isle of Man Department of Infrastructure has confirmed that the island is considering raising excise duty on cars and motorbikes, as part of a review of the structure of the existing system.
The Department said that GBP800,000 (USD1.2m) each year could be raised by increasing excise duty on cars by ten percent and duty on motorbikes by four percent. It is proposed also that taxes on vehicles will be reformed to ensure that tax rates more closely reflect carbon emissions. The proposals will go before the island's Parliament this month.
The proposed changes were first announced by the Department in October 2014, as part of a package of measures drawn up to balance the budget. Revenue generated from vehicle duty in the Isle of Man is worth about GBP12.5m each year, but the cost of maintaining the road network in 2015-16 is estimated to be more than GBP16m.
Manx Minister of Agriculture, Fisheries and Forestry Phil Gawne said: "The Department invests a lot of its resources in the upkeep and safety of our roads. It is part of our commitment to providing the foundations on which others can build economic and social success. Figures show that we don't collect enough in vehicle duty to meet the cost of highway maintenance, so the revenue from these changes will provide much needed additional funding."
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