Environmental Tax Law and Legal Definition
Environmental Tax is the tax imposed for environmental reasons, e.g. to provide an incentive to reduce certain emissions to an optimal level or taxes on environmentally harmful products.
Environmental taxes are designed to encourage businesses to use resources efficiently and discourage business practices that damage the environment. If one invest in environmentally friendly equipment, he or she could receive tax breaks.
For example, Energy-efficient machinery, qualifies for a particular per cent tax allowance in the first year it is bought. This allows businesses to offset the costs against taxable profits.