The Government has adopted the procedure for the transfer of fuel excise revenues to local budgets

2/8/17

Today, the Cabinet of Ministers has adopted a decree setting the procedure for the transfer of fuel excise revenues to the local budgets. The procedure was developed by the Ministry of Finance.

What was the problem?

In 2016, the 5% tax on the retail sale of fuel was abolished which used to be transferred to the local budgets. The reason for that step were manipulations by some of the market players resulting in falling revenues of the local budgets from this tax. The Ministry of Finance elaborated an effective taxation scheme according to which 13.44% of the excise tax on produced and imported fuels shall be transferred to the local budgets. For example, the current fuel excise rate is Euro 213.5 for 1000 liters – that means that Euro 28.7 for each 1000 liters (13.44%) shall be transferred to the local budgets.

What is the benefit?

First, this taxation model shall contribute to the de-shadowing of the fuel market and increase the fuel excise revenues. Secondly, this shall secure stable revenues for the local budgets, which shall positively impact the social and economic development of the regions in 2017.

Additional information:

The key points of the procedure:

- a part (13.44%) of the excise tax on produced and imported fuel shall be transferred to the local budgets;

- the fuel excise tax revenues shall be distributed between the local budgets on daily basis.

Transfers of fuel excise tax revenues shall be distributed based on the actual amount levied on fuel retail sales on the respective territory in 2016.

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