Tax exemption resulted in lower fuel prices

THE Government’s tax exemption resulted in lower retail fuel prices from May to December last year, according to the Independent Consumer and Competition Commission (ICCC).
Commissioner and chief executive officer Paulus Ain said the ICCC would continue to implement tax exemption on the refined petroleum products this year in consistent with a Government decision under the 2023 budget.
“The ICCC has been excluding the Goods and Services Tax (GST) and excise duty in its retail price determinations for petrol, diesel and kerosene since May, 2022, despite excessive increase in the world prices for crude oil,” Ain said.
“The tax exemption, has significantly contributed to some decreases in the costs of doing business in the country.
“The ICCC is also mindful of underlying domestic factors and structural conditions that continues to drive up the cost of doing business in the country such as bad road conditions, high security costs due to law and order problems, high rentals, unreliable power supply and high import costs amongst other factors.
“Some of these factors are fixed in nature whereby businesses will still incur even when they are generating less or no revenue at all.
“The 2023 budget, the Government has decided to continue excluding the excise duty of 61 toea per litre on petrol, and 23 toea per litre on diesel.
“These tax exemptions have again been reflected in the retail fuel price determinations by the ICCC for this month and will continue until June.
“In Budget 2023, the Government has also decided to reinstate the 10 per cent GST on petrol, diesel and kerosene that will be sold in the service stations.
“The Government’s decision to reinstate GST on fuel products has again been reflected in the ICCC’s retail fuel price determinations.
“Consumers are expected to continue to see some cost savings at the retail end, under the excise exemptions imposed by the Government.”
The savings from the tax exemptions on diesel (Kina/litre) for last year were: May – K5.59 per litre (retail price with tax) to K4.47 (retail price without tax); June – K5.52 to K4.41; July – K6.19 to K5.02; August – K5.41 to K4.31; September – K5.31 to K4.22; October – K5.21 to K4.13; November – K5.41 to K4.31; December – K5.20 to K4.12