“As of Monday, the fuel tax burden will take into account this decrease in ISP (and the corresponding effect in terms of VAT), which translates into an additional tax deduction of 14.2 cents per liter for diesel and 15 cents per liter for diesel. 5 per liter of gasoline,” the Ministry of Finance said in a statement.
To this decrease, resulting from the new measure that reflects on the Internet service provider, the equivalent of applying a 13% VAT rate to fuel, is added the effect of the weekly mechanism that reduces the tax on petroleum products (ISP) from the VAT revenue generated by higher prices. fuel.
Thus, the deduction of 4.7 cents per liter for diesel and 3.7 cents per liter for gasoline will be maintained over the next week, as a result of this weekly compensation mechanism, which was launched in March.
The Ministry of Finance notes that the ISP will continue to review weekly, so that any unusual VAT revenue continues to be returned via the ISP, “with the mechanism now adjusted to reflect the reduction in the tax burden. Completed May 2nd.”
The ministry, led by Fernando Medina, notes that “the two measures – the reduction of ISP unit rates to the equivalent of 13% the rate of value-added tax and the weekly mechanism for reviewing this tax – are cumulative measures.”
Thus, “in calculating the two effects, from Monday, the Portuguese will benefit from a reduction in the tax burden on diesel and gasoline by 20 cents a liter.”
The Ministry of Finance adds that the value of the tax burden reduction now applied for the month of May “will be reviewed for the month of June”, in order to continue to replicate the effect that may result from the reduction of the value-added tax rate at 23% to 13% taking into account the updated prices.
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