Valainis: It is necessary to discuss reducing the excise tax on gasoline and taxing excess profits 0 10

On Tuesday, during a closed part of the meeting, the government reviewed a report from the Ministry of Economics on monitoring fuel prices on global exchanges and their impact on the Latvian economy. The minister reported that he informed the government about how fuel prices affect various sectors of the economy and warned of a significant increase in gasoline prices.

Valainis emphasized that discussions on reducing the excise tax on gasoline need to begin now. Another possible solution could be to lower the value-added tax (VAT) on fuel, as done in Poland and Spain.

Possible solutions are planned to be discussed at upcoming government meetings.

Earlier, the minister stated to the LETA agency that initial conclusions regarding the reduction of the excise tax on diesel fuel indicate the need to introduce a tax on excess profits.

According to Valainis, fuel prices are decreasing on global exchanges, but this is not observed in Latvia. "Fuel retailers should reconsider their business policies, as their words do not match their actions," the minister said.

Speaking about other solutions to reduce fuel prices, the minister noted that other measures have been proposed, including lowering the VAT rate to bring prices closer to the level of 1.8-1.9 euros per liter. If the price drops below 1.9 euros, the tax rate can be returned to its previous level.

As reported, on April 1, a law came into effect that limits the rise in fuel prices, providing temporary measures to reduce the impact of rising fuel costs on the economy and the population.

The law provides for a temporary reduction in the excise tax on diesel fuel from 467 to 396 euros per 1000 liters. In turn, for marked diesel fuel used in agriculture, the excise tax rate is set at 21 euros per 1000 liters. The reduced rates will apply from April 1 to June 30.