Economy 24 October 2024, 12:41pm

Gov't to raise taxes retroactively on petrol stations, fuel prices could rise further

Portfolio

The Association of Independent Petrol Stations (FBSZ) opposes further increases in fuel taxes and condemns the intention to increase taxes retroactively on all taxes, according to a statement issued by the FBSZ. According to the Federation, the government's proposal to amend the law could lead to a further increase in fuel prices.

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The Government intends to amend Act LVII of 2015 on energy efficiency.

Under the Hungarian rules of the Energy Efficiency Obligation Scheme (EKR), petrol stations are obliged to make savings in proportion to the energy content of the fuel they sell, at a predetermined rate, and to redeem these savings in cash. The amount is HUF 50,000/GJ, which would rise to HUF 70,000/GJ under the draft law submitted for public consultation last week.

The way the system works is that each year you have to pay the energy savings tax on sales made two years earlier, or conversely, you have to set aside enough money in a current year to pay it in two years' time.

When the law came into force in 2019, this was HUF 1.05 per litre, but now the tax on fuel is HUF 11 per litre.

The government now wants to increase the level of this obligation, with retrospective taxation, by obliging petrol stations to pay a much higher tax (17.45 HUF/litre) from 2023 onwards, rising to 32.6 HUF/litre by 2027.

Fuel distributors could not have prepared for such a retroactive tax increase,

the FBSZ writes.

According to the original law published in 2015, this tax would remain unchanged between 2025 and 2027, then gradually decrease and be abolished after 2030. The new proposal above instead includes a significant increase, as illustrated in the table below:

This means another tax increase of HUF 22, retroactive to 2023, they write.

The FBSZ pointed out that fuel distribution has already borne a significant tax burden, as just earlier this year the extra profit tax was increased 20-fold, and currently there are still some 62 taxes, levies and cost elements to be paid from the retail margin.

The Association protests against the further taxation and increase in the price of fuel, and condemns the retroactive taxation, which it considers unjust, unfair and in no way justified by the state of danger due to the war in a neighbouring country.

Cover photo (for illustration purposes only): Portfolio