Polish Prime Minister Donald Tusk announced a significant reduction in VAT and excise duties on fuels, alongside potential price controls, to combat rising costs.
Government Announces Fuel Tax Cuts and Potential Price Caps
Prime Minister Donald Tusk announced a radical reduction in VAT and excise duties on fuels, and the possibility of introducing maximum fuel prices at gas stations. He assured the public there is no risk of fuel shortages in Poland.
Tusk stated the goal is to ensure the lowest possible fuel prices for consumers and prevent anyone from profiting from the current situation at the expense of Polish citizens.
Financial Impact of Tax Reductions
Finance Minister Andrzej Domański detailed the costs of the reductions, stating the VAT cut will cost 900 million złoty monthly, while the excise duty reduction will cost 700 million złoty. Work is beginning on a tax for excess profits to offset these losses.
Recent Fuel Price Increases
In recent weeks, oil prices have risen by 45 percent, diesel prices by over 40 percent, and gasoline prices by over 20 percent, which is now reflected at gas stations. The government is taking action to lower these prices.
The VAT on gasoline and diesel is being reduced from 23 to 8 percent, and excise duties are being lowered to the minimum permissible levels – by 29 groszy per liter for gasoline and 28 groszy for diesel. These measures are expected to lower gasoline prices by 1.2 złoty per liter.
Temporary Measures and Future Adjustments
These measures are temporary, and the government will flexibly adjust excise and VAT rates based on market conditions. Wholesale diesel prices fell by 30 groszy on Thursday, even as crude oil prices rose.
Tax on Excess Profits to Offset Budget Impact
The VAT reduction will decrease budget revenues by 900 million złoty monthly, and the excise reduction by approximately 700 million złoty monthly. To address this, the government is working on a tax for companies with excess profits due to high oil prices and margins.