Extra VAT on fuel following hikes offset by lower fuel tax
Answering questions from journalists, António Costa said that the current global situation of rising energy prices must be managed "prudently".
The extraordinary increase in VAT revenue resulting from the rise in fuel prices will be returned weekly through a reduction in the tax on petroleum products (ISP), Portugal’s prime minister said on Tuesday.
Answering questions from journalists, António Costa said that the current global situation of rising energy prices must be managed “prudently”, without changing the government’s priority “of not fiscally subsidising fuel”.
“There was a price increase, reflected in an increase in VAT. So what we are doing is returning this increase to drivers through a reduction in the ISP. We are only reducing the ISP because this is the easiest way of quickly returning the extraordinary income we are receiving”, he stated.
Costa said that this had already been done this week and would be repeated: “We will continue to assess price trends and, whenever there is an increase in VAT revenue attributed to this price increase, we will return it via the ISP.
“We are not going to finance fossil fuels, but the state does not want to collect extraordinary revenue because there is an extraordinary increase,” Costa added.
