September 28, 2018 - 3:26 PM EDT
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US Businesses Benefit from Taxes on Fuel Significantly Lower Than World Average – Shows Global Study

•17 percent taxes on gasoline places the US amongst lowest in study•European tax rates higher than other major economies including USA and Japan

STERLING HEIGHTS, Sept. 28, 2018 (GLOBE NEWSWIRE) -- US companies enjoy some of the lowest taxes as a percentage of the price of fuel in the world – on average 66 percent lower than the global average – shows a new study by UHY, the international accounting and consultancy network.

 

UHY explains that in the US, on average, taxes comprise 17 percent of the cost of the price of gasoline and 18 percent of the cost of the price of diesel fuel. This compares favorably to the global averages of 50 percent and 44 percent respectively.

 

Taxes amount to 60 percent of the cost of diesel fuel in the UK, the highest in the study, and 53 percent of the cost in Germany.

 

In the United States Federal taxes on gasoline average just slightly over 18 cents per gallon, with 60% of all revenue raised spent on highway and bridge construction. Only 27 states currently impose taxes on Liquified Petroleum Gas (LPG).

 

UHY explains that funds raised from fuel taxes are often used to fund a wide range of initiatives including road and infrastructure improvements as well as education.

 

In many major economies outside of Europe, taxes make up significantly lower proportions of the price of gasoline and diesel fuel, including:

 

  • Japan, where 42 percent of the cost of gasoline and 33 percent the cost of diesel fuel is from tax
  • Canada, with taxes making up 35 percent of the cost of gasoline and 32 percent of diesel fuel
  • United States**, where taxes comprise 17 percent of the cost of gasoline and 18 percent of diesel fuel

 

Lower fuel taxes means that the cost of filling the tank*** of a Ford Transit van with gasoline – indicative of a typical business expense – in the US amounts to 60.61. This compares to $135 in Europe on average and the global average of $111.

 

UHY explains that – in contrast to the US – higher fuel duties and taxes in Europe are the main contributor to higher fuel prices for gasoline, diesel fuel and LPG

 

While the cost of filling a tank of a Ford Transit with diesel fuel in the US is 60 percent lower than the world average, the same cost is on average 24 percent higher in European countries than the rest of the world. As diesel fuel is used in the majority of commercial vehicles, this heavy burden is borne primarily by businesses.

 

Scott Miller, National Petroleum Group Leader of UHY member firm UHY Advisors in the United States comments: “Lower fuel taxes mean that businesses in the US face a lower burden for a key operating cost that affects almost all businesses. This can ultimately help economic growth.”

 

“While the price of gasoline can vary across individual states in the US, the trend is clear. The overall level of taxes levied on fuel tends to be lower than that of Europe. That may be a factor, albeit a minor one, behind the US’ strong economic growth.”

 

“For smaller and fast-growing businesses, lower taxes on fuel can be especially beneficial, particularly in sectors heavily depended on distribution fleets like retail. The US Government is helping to provide such a business-friendly environment with lower fuel duties.”

 

“For any government, taxes on gasoline and diesel fuel are a key tool for helping to cut greenhouse gas emissions and can be used to fund infrastructure spending. However, there needs to be a balance to ensure fuel and tax costs do not become prohibitive.”

 

“The relatively lower rates in major developed economies, most notably the United States, compared to its international competitors in Europe shows that a balance can be struck.”

 

“Governments can consider initiatives such as freezing fuel duties or even cutting the rates. There needs to be greater international cooperation to ensure there is not too much discrepancy in fuel prices between different countries.”

 

UHY studied fuel taxes and prices in 24 countries around the world, looking at the cost of gasoline, diesel fuel and LPG and the percentage of the price that came from tax.

 

France ranked the highest for tax comprising the largest percentage of the total price of petrol – 64 percent. Denmark ranked the most expensive in the UHY study for the overall cost of filling a tank with  gasoline– costing $160.

 

Filling the tank of a Ford Transit with gasoline – proportion of cost made up of fuel cost and tax (Major economies and world averages)

 

 

 

 

 

 

Filling the tank of a Ford Transit with petrol: breakdown of cost of fuel and tax

 

Rank Country Tax
USD
Cost of
gasoline
USD
Total Cost
USD
Tax as a percentage of total cost
1 France 91.27 52.44 143.71 63.51%
2 Italy 95.23 56.84 152.07 62.62%
3 UK 83.20 52.00 135.20 61.54%
4 Croatia 81.60 51.20 132.80 61.44%
5 Germany 82.42 52.78 135.20 60.96%
6 Spain 71.68 46.46 118.14 60.00%
7 Rep. of Ireland 82.42 55.18 137.60 59.90%
- Europe average 79.16 55.61 134.77 58.73%
8 Denmark 90.27 69.42 159.69 56.53%
- G7 average 62.67 54.71 117.38 53.39%
9 Portugal 78.44 68.98 147.42 53.21%
10 Romania 56.98 52.12 109.10 52.00%
11 Poland 57.20 54.31 111.51 51.30%
- World average 55.19 55.67 110.86 49.79%
12 India 43.84 50.03 93.87 46.70%
13 Vietnam 32.92 42.19 75.11 43.80%
14 Japan 46.20 63.70 109.90 42.02%
15 Uruguay 56.41 84.41 140.82 40.06%
16 Mexico 34.16 51.24 85.40 40.00%
17 Russia 20.52 34.68 55.20 37.00%
18 Australia 31.44 56.56 88.00 35.72%
19 New Zealand 41.37 76.60 117.97 35.00%
20 Canada 30.00 55.00 85.00 35.00%
21 Zambia 33.09 75.76 108.85 30.39%
22 Pakistan 18.44 47.56 66.00 28.14%
23 United States 10.38 50.23 60.61 17.12%
24 China 0.00 91.56 91.56 0.00%

 

Filling the tank of a Ford Transit with diesel: breakdown of cost of fuel and tax

 

Rank Country Tax
USD
Cost of
diesel
USD
Total Cost
USD
Tax as a percentage of total cost
1 United Kingdom 84.00 55.20 139.20 60.34%
2 Italy 82.93 57.96 140.89 58.86%
3 Croatia 71.28 54.32 125.60 56.75%
4 Republic of Ireland 70.57 55.83 126.40 55.83%
5 Germany 62.76 55.64 118.40 53.01%
- Europe average 65.59 60.54 126.14 52.00%
6 Spain 59.45 54.00 113.45 52.00%
7 Denmark 67.63 72.04 139.67 48.42%
8 Romania 55.24 60.26 115.50 48.00%
9 Poland 50.90 55.59 106.49 47.80%
- G7 average 51.00 59.09 110.08 46.32%
10 Portugal 56.43 69.57 126.00 44.79%
11 France 60.34 75.58 135.92 44.40%
- World average 44.55 56.78 101.33 43.96%
12 Mexico 30.70 46.05 76.75 40.00%
13 New Zealand 32.98 51.44 84.42 39.00%
14 Vietnam 23.56 38.06 61.62 38.20%
15 Pakistan 29.75 49.25 79.00 37.88%
16 India 30.25 50.81 81.06 37.32%
17 Australia 32.05 59.15 91.20 35.14%
18 Japan 30.30 61.10 91.40 33.12%
19 Canada 25.00 54.00 79.00 32.00%
20 Russia 16.82 39.18 56.00 30.00%
21 Zambia 20.18 75.29 95.47 21.14%
22 Uruguay 19.80 83.73 103.53 19.12%
23 United States 11.64 54.13 65.77 17.70%
24 China 0.00 79.20 79.20 0.00%

 

Filling the tank of a Ford Transit with Liquefied Petroleum Gas (LPG): breakdown of cost of fuel and tax

 

Rank Country Tax
USD
Cost of
LPG
USD
Total Cost
USD
Tax as a percentage of total cost
1 Croatia 25.93 29.51 55.44 46.77%
2 Poland 20.56 22.46 43.02 41.00%
3 United Kingdom 24.48 35.28 59.76 40.96%
4 Italy 22.56 34.13 56.69 39.79%
5 Canada 17.00 32.00 49.00 35.00%
- G7 average 18.47 37.63 56.11 32.93%
6 Germany 16.07 33.41 49.48 32.48%
- Europe average 18.52 38.93 57.45 32.24%
7 Romania 12.58 32.28 44.86 28.00%
- World average 14.83 41.34 56.17 26.40%
8 Russia 6.68 19.31 25.99 25.00%
9 Australia 11.82 37.14 48.96 24.14%
10 Spain 19.24 62.44 81.68 24.00%
11 Portugal 12.99 43.49 56.48 23.00%
12 India 10.69 36.81 47.50 22.50%
13 Uruguay 9.99 42.26 52.25 19.12%
14 France 12.26 57.36 69.62 18.00%
15 Vietnam 8.63 86.31 94.94 9.10%
16 New Zealand 5.82 61.39 67.21 9.00%

*EU countries

**US figures based on averages across US states

***Tank size: 80 litres for gasoline and diesel fuel, 72 litres for LPG

****Tax rates include VAT, some or all of which may be reclaimed by businesses in some countries, including EU member states

 

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About UHY LLP

UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of “UHY Advisors.” UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP and UHY Advisors, Inc. are US members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. “UHY” is the brand name for the UHY international network. Any services described herein are provided by UHY LLP and/or UHY Advisors (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.

 

About UHY, the network

Established in 1986 and based in London, UK, UHY is a leading network of independent audit, accounting, tax and consulting firms with offices in over 325 major business centres across more than 95 countries. Our staff members, over 7,850 strong, are proud to be part of the 16th largest international accounting and consultancy network. Each member of UHY is a legally separate and independent firm. For further information on UHY please go to www.uhy.com.

 

UHY press contact: Dominique Maeremans on +44 20 7767 2621 Email: [email protected].

 

UHY is a member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit www.forumoffirms.org.

 

UHY is an international association of independent accounting and consultancy firms, whose organizing body is Urbach Hacker Young International Limited, a UK company. Each member of UHY is a separate and independent firm. Services to clients are provided by the UHY member firms and not by Urbach Hacker Young International Limited. Neither Urbach Hacker Young International Limited nor any member of UHY has any liability for services provided by other members.

Chris Clark
UHY Advisors Inc.
5862541040
[email protected]

Source: GlobeNewswire (September 28, 2018 - 3:26 PM EDT)

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