Slight delay to reduction in fuel consumption tax

The government’s planned reduction to the fuel consumption tax has been delayed until Saturday to allow parliament to vote on the plans and then allow time for petrol station proprietors to change their prices.

A bill to reduce the fuel consumption tax by 8.33 cents per litre on petrol and six cents per litre on diesel was put before the House finance committee on Thursday morning and is expected to be voted on by the House plenary session later in the day.

After that, it is expected that the adjustments will be published in the official government gazette, before entering force on Saturday, with the finance ministry’s tax policy unit chief Nayia Symeonidou saying that this will ensure that “companies are given time to adjust their prices”.

She added that the extension of the reduced five-per-cent rate of value added tax on electricity through May next year is already in force, as it was brought about by decree.

Asked by committee chairwoman and Diko MP Christiana Erotokritou how it will be ensured that the savings will be passed on to consumers and not pocketed by petrol station proprietors, she said that the consumer protection service will “monitor … the implementation of the measures”.

She was then asked whether there could be “punishments” for those found to be profiteering, and said that it is the commerce ministry, which is “responsible” for this matter.

Erotokritou said that she will as such call on the commerce ministry, which is headed by Michael Damianos, who belongs to the same party as her, to “increase checks” in this regard.

If passed by the House later on Thursday, the reduced fuel consumption tax rate will be in force until the end of June.

The measure is one of eight announced by the government last week, with others including a zeroing of the rate of VAT on meat, poultry, and fish until the end of September, and the non-implementation of “green taxes” on fuel, which had been set to raise the retail price of fuel by nine cents per litre.

Additionally, the government will also offer to cover 30 per cent of the wages of all workers in the hotel sector during this month, and will draw up a “special plan for more support for airlines to secure the seamless connectivity of the country with important destinations for the attraction of tourists”.

The government will also subsidise 15 per cent of the cost of all fertiliser and agricultural supplies for farmers this month and in and May. The subsidies for farmers are counted as two separate measures.