Reducing the tax burden on fuel to 34 cents

The Ministry of Finance reported that the reduction in the tax burden on fuel, in March, will be 34 cents per liter of diesel and gasoline.

“The government maintains fuel subsidies,” given all the procedures in place, the ministry said in a statement.

The tax burden, in February, was 35.9 cents per liter of diesel and 34.8 cents per liter of petrol, which reduced the total tax deduction in March, as the carbon tax is still pending, according to 2021 values.

Regarding the reductions in the ISP (oil and energy products tax), the executive authority indicates that it decreases in petrol and diesel, compared to February, a decrease “in light of the development of fuel prices in recent weeks.”

The Ministry of Finance also indicated, as announced, that the mechanism applied to the ISP is equivalent to reducing the value-added tax rate from 23% to 13% and the mechanism to compensate by means of the ISP reduction for additional revenue from the value-added tax arising from changes in fuel prices.

“In light of the recent changes in diesel and gasoline prices, and compared to the previous month, these temporary measures led to a decrease in the ISP discount for diesel by 1.9 cents, and a decrease in the ISP discount by 0.9 cents per liter for gasoline compared to the previous month.”

Finally, the statement highlights the maintenance of the 6 cents reduction in the ISP for agricultural diesel and the maintenance of the suspension of the carbon tax, which translates into an additional discount of 13.4 cents per liter for diesel and 12.2 cents per liter for gasoline, compared to the carbon tax that will be set in 2023, a discount added to the value added tax.

“So it’s 15.8 cents per liter of diesel and 15 cents per liter of petrol. That discount hasn’t changed since February 2023,” he adds.