The proposed law presented by the Government to parliament to temporarily lower the minimum tax limits on petroleum and energy products (ISP) provides for the reduction to be in force until June 30.
The legislative initiative was entered into parliament on Monday, the same day it was approved by the Council of Ministers electronically, and includes a “request for priority and urgency” for the Assembly of the Republic to consider the amendment, aimed at responding to the increase in fuel prices due to the .
The Government wants to have “sufficient margin to continue” applying the ISP discount through the return of additional VAT revenue and, to this end, it considers it “convenient temporarily and exceptionally reduce ISP unit rate floorsensuring the limits established by European legislation”, explains the executive in the explanatory memorandum of the initiative.
199.89 euros per 1,000 liters on unleaded gasoline and 156.66 euros without diesel
According to the proposal, the minimum limits of ISP unit rates for unleaded gasoline drop to 199.89 euros per 1,000 liters and diesel prices drop to 156.66 euros.
Tax rates are defined by governments through ordinances that determine the values to be applied from a given moment, and the values must fall within a range defined by law, in the Special Consumption Tax Code (CIEC).
As this is a matter that changes taxes, the Parliament must pronounce on the changebecause setting the level of taxation is the prerogative of the Legislative Assembly.
The text provides for a “temporary and exceptional change to the minimum limits of unitary tax rates on petroleum and energy products (ISP) established in articles 92, 94 and 95 of the IEC Code”, says the initiative.
The change will allow the Government “continue to reduce, periodically and temporarily, the ISPthrough the return of additional VAT revenue, which results from the recent evolution of fuel prices, following the conflict in the Middle East”, as explained by the executive in the statement from the Council of Ministers issued when it approved the proposal.
Temporary reduction occurs when the increase in exceeds ten cents compared to the week of March 2-6.
In the explanatory memorandum of the initiative, the government recalls that the discount was decided in the wake of the “extraordinary increase in fuel prices resulting from the impact of the geopolitical and military crisis in the Middle East on the prices of oil and its derivatives, in a context of high uncertainty”, given the “social and economic impact” that the worsening brings “to families and companies”.
