EMBASSIES MUST COUGH UP THEIR CONGESTION CHARGE

1.27.13pm BST (GMT +0100) Tue 18th Oct 2005

Commenting on the refusal of a number of embassies to pay the Congestion Charge, citing the Vienna Convention, London Assembly Liberal Democrats transport spokesperson, Geoff Pope, said:-

"The Mayor must work with the Foreign and Commonwealth Office to get those embassies who refuse to pay the Congestion Charge on the basis that it is a tax, rather than a charge, to cough up.

"All the international evidence, legislation and legal opinion states that the Congestion Charge is just that - a charge and not a tax.

"Embassies have been crying wolf with the Vienna Convention for far too long. It is time that the Mayor started to clamp down by clamping cars."

ENDS

Notes to editor

According to the Organisation for Economic Cooperation and Development:

"16.A further development however has been the government coming to us to explore whether activities could be treated as market and the unit running them as a quasi corporation. One example is the London congestion charge - there are similar charges in some other British cities. This could have been seen as a source of tax revenue if the money had gone in to a general fund for spending on the full range of services. However the legislation specifies that the income from the congestion charge can only be spent on a limited range of transport related items in London. Transport in London is organised as a number of real and quasi public corporations owned by local government in London. These provide market services to users of London's transport including underground trains and buses. We see the road charge scheme as an additional market service provided by them. There is cross subsidy between different categories of user but this is common in the provision of services in the private sector. The congestion charge is therefore a service charge not a tax because of the ring fenced accounting inherent in the scheme. This is also consistent with the national accounts manuals where the Eurostat Manual on Government Deficit and Debt, which is consistent with ESA95, cites road and bridge tolls as examples which should be treated as payments for the provision of services."

http://www.oecd.org/dataoecd/10/38/24330376.doc

According to reports, Embassies are citing Articles 34 and 49 of the Vienna Convention, which can be found below:-

"Article 34

FREEDOM OF MOVEMENT

Subject to its laws and regulations concerning zones entry into which is

prohibited or regulated for reasons of national security, the receiving

State shall ensure freedom of movement and travel in its territory to all

members of the consular post.

Article 49

EXEMPTION FROM TAXATION

1. Consular officers and consular employees and members of their families

forming part of their households shall be exempt from all dues and taxes,

personal or real, national, regional or municipal, except:

(a) indirect taxes of a kind which are normally incorporated in the price

of goods or services;

(b) dues or taxes on private immovable property situated in the territory

of the receiving State, subject to the provisions of Article 32;

(c) estate, succession or inheritance duties, and duties on transfers,

levied by the receiving State, subject to the provisions of paragraph

(b) of Article 51;

(d) dues and taxes on private income, including capital gains, having its

source in the receiving State and capital taxes relating to

investments made in commercial or financial undertakings in the

receiving State;

(e) charges levied for specific services rendered;

(f) registration, court or record fees, mortgage dues and stamp duties,

subject to the provisions of Article 32.

2. Members of the service staff shall be exempt from dues and taxes on the

wages which they receive for their services.

3. Members of the consular post who employ persons whose wages or salaries

are not exempt from income tax in the receiving State shall observe the

obligations which the laws and regulations of that State impose upon

employers concerning the levying of income tax."