Cyprus Mail

Fuel tax cut would cost around €57m

A joint party proposal to cut fuel tax by five cents per litre will cost the state around €57m, the House finance committee heard on Monday.

The proposal, tabled by the leaders of Disy and Diko, Averof Neophytou and Nicolas Papadopoulos, is opposed by the government, which wanted to cut the tax on income from interest rates from 30 per cent to 17 per cent instead.

That would have cost some €45m.

Finance Minister Harris Georgiades said there were also environmental reasons.

Observers say the cut in fuel tax essentially undermines the state’s plan to cut road tax for low emission vehicles.

MPs heard on Monday that the Disy-Diko proposal will be put to the vote on Wednesday afternoon and will come into effect immediately.

The five-cent reduction in tax on petrol, diesel, and heating fuel will cost the state €48.4m — €57.5m including VAT.

The state stands to lose €28.1m from petrol, €21.9m from diesel, and €7.5m from heating fuel.