Government makes extraordinary reduction in fuel tax

News about fuel has not pleased the Portuguese. The price escalation is worrying, especially when you know that 60% of the value goes to taxes.

To compensate for the rise in the price of oil, the Government will reduce the fuel tax and will permanently monitor the evolution of prices. The measure will be in effect until January 31st.

The Secretary of State for Fiscal Affairs, António Mendonça Mendes, in a statement made in Lisbon, said that...

The Government took the decision to reinstate the model for returning the tax revenue it obtains through the price of fuel.

The Secretary of State added that “this means that, given the increase in the average sale price of fuels to the public, the State collects more than 90 million euros in VAT and this value will be reflected in the reduction of the tax rate on products. Petroleum».

Mendonça Mendes said that "this measure takes effect tomorrow and will be in effect until January 31."

The Secretary of State recalled that “this mechanism was already used in 2016, when prices were very low and the ISP was increased to compensate for the drop in VAT revenue. Now, we use the same mechanism to do the opposite».

"Since we are having more VAT revenue than expected, we will return this VAT revenue in full to consumers, temporarily lowering the unit ISP rate for gasoline and diesel, in the respective proportion," he also said.

Stressing that "the Government monitors the evolution of oil prices very carefully", Mendonça Mendes recalled that the Minister of Environment and Climate Action "still recently spoke of the measures that were being taken to reduce its impact on the electricity bill" and “ERSE announced its tariff proposal, which already reflects the Government's measures”.

He also referred that the Minister of Infrastructure and Housing “already has a meeting scheduled with ANTRAM to carry out this monitoring, and we will take the necessary measures”.

Since "the VAT that is received in excess is fully refunded to consumers by lowering the ISP rate", "now operators must reflect it in the sale price to the public", he concluded.