No RES tax on transport, for now

The government does not intend for the moment to levy a renewable energy sources (RES) tax on road transport, the energy ministry said Monday.

In a statement, the ministry was responding to the Cyprus Consumers Association which had warned that a new bill now discussed in the House contains a clause for the imposition of an RES tax on car fuel.

The ministry dismissed this as “misinformation.”

“We suggest that the Cyprus Consumers Association, before it comes out with announcements that misinform the public, to obtain reliable information from our ministry.”

In reality, it added, such a clause already exists in current legislation but has never been applied. Therefore, the existing clause has merely been copied to the new bill.

It cited the clause in the current law, passed back in 2013, which provides for the state to levy a consumption fee on energy products other than electricity – such as on conventional fuels.

“From 2013 to the present day, the government did not impose such a fee on motor vehicle/heating fuel, despite the fact that the imposition of high taxes on liquid fuels is popular practice among almost all EU member-states as part of the ‘green tax reform’, aimed at preventing or reducing the use of conventional fuels and easing the transition to the ‘green economy’.”

The ministry added it has no intention to activate the clause in question within the next year, given the current rise in oil prices already taking its toll on consumers.

On the contrary, the government has taken a series of steps to offset price hikes in electricity and gas at the pump, such as cutting the VAT and consumption tax.

The ministry also politely rebuffed a request by the Consumers Association that it participate in the committee that manages the Renewable Energy Sources and Energy Conservation Fund.

It noted that the committee’s actions and decisions are taken “with full transparency and in the interest of the public.”

The Renewable Energy Sources and Energy Conservation Fund is the government’s main financial tool promoting RES and energy conservation, with a view to achieving the binding national targets, as defined by the legislation and the relevant European Directives.