Optimising Government Fuel Duty Revenue

This article presents a mathematical model for finding a level of motor vehicle fuel duty that maximises government (UK) tax revenue. A function is derived for a possible relationship between fuel duty (tax) and the total government revenue accruing from the duty. By optimising this function a formula is found for coalculating the maximum tax revenue possible for a government and a method is developed for determining the unknown parameters in the formula. A numerical example provides a quantitative illustration of the operation of the derived model.