Options which substantially promote public transport can lead to reductions in HM Revenue and Customs' indirect tax receipts by shifting expenditure from cars and car fuel, which are heavily taxed, to public transport services on which the indirect tax rate is relatively low. Similarly, a saving in fuel costs for drivers (e.g. due to a road improvement) will lead to loss of tax revenue to the Government.
These impacts represent costs to the Government, and it may therefore be necessary to assess the expected change in indirect tax revenue to the Government due to changes in the transport sector.
There is an obvious issue, within Scotland, that indirect tax revenues accrue to HM Treasury but that transport is a devolved power and subject to the Scottish Budget. For reasons of consistency with HM Treasury Green Book, this issue is not tackled directly in this section but in Section 12.7 which deals with the presentation of results.
