SaS Urges Fuel Tax Cuts, Says Motorists Could Save €20 per Tank

Bratislava, 29 July (TASR) - The opposition Freedom and Solidarity (SaS) party on Wednesday called on the government to reduce excise duty on motor fuels to the minimum level permitted under European legislation and to cut VAT to 15 percent, arguing that motorists could save up to €20 on a full tank of petrol. According to the party, any loss of state budget revenue would be offset by higher fuel sales. MP Karol Galek (SaS) said that excise duty is fixed at €0.52 per litre for petrol and €0.37 per litre for diesel. However, he noted that EU legislation allows member states to apply minimum rates of €0.36 per litre for petrol and €0.33 per litre for diesel. He also pointed out that Slovakia levies 23-percent VAT on motor fuels, compared with 8 percent in neighbouring Poland. "Why couldn't we also reduce VAT to, for example, 15 percent?" asked Galek. In SaS's view, the government has no interest in lowering taxes because rising fuel prices increase VAT revenues. "If the price rises by 10 cents, for example, the state collects an additional €6 million in VAT every month. Over a year, that amounts to around €70 million," said Galek. MP Marian Viskupic (SaS) argued that lowering fuel taxes wouldn't harm the state budget. "Higher sales would compensate for the loss of tax revenue from lower rates. If sales increased sufficiently, tax revenues could even rise," he said. He added that lower fuel prices would also make Slovakia's logistics sector more competitive, benefit households and have a positive effect on the wider economy. Viskupic said that Slovakia enjoys the advantage of having its own modern oil refinery, but the government has failed to make use of this. "Instead of creating conditions for higher domestic fuel sales, it is driving motorists to refuel abroad. If we reduced taxes on motor fuels, more Slovaks would fill up at home, while foreign drivers would also come to refuel in Slovakia. The state would receive higher revenues from fuel sales while also helping its own people and businesses," he said. Prime Minister Robert Fico (Smer-SD) has previously rejected calls to reduce excise duty on motor fuels, arguing that there is no fiscal room for such measures during the government's budget consolidation efforts. In April, he said that the government, in cooperation with the Slovnaft refinery, was pursuing a strategy of ensuring that Slovakia has the cheapest diesel prices in neighbouring countries, offers competitive petrol prices, and remains well within the lower half of EU-member states in terms of fuel prices. mf/df