House passes reduced tax on heating fuel

The House on Thursday approved the tax reduction on heating fuel, part of a relief package to tackle the cost of living unveiled in late September. The tax on heating fuel will be cut by 5.3 cents a litre. In voting the bill through, MPs also amended it, so that the discounted tax now kicks in as of October 23 instead of November 1. The reduced rate will apply until April 30, 2027. The government estimates the fiscal hit from loss of tax revenue at around €5.2 million. In remarks on the House floor, all MPs agreed with the measure, but some argued that it was a case of too little, too late. Alma MP Odysseas Michaelides noted that, practically speaking, heating fuel would now cost €1,600 a tonne – instead of €1,650. He also recalled that only in March this year, a tonne cost €950. Michaelides said the government should have also requested from the European Commission a further tax rate reduction for motor fuel, as it had done for heating oil. Direct Democracy MP Yiannis Laouris called the measure a “stopgap solution”. He said it’s inconceivable that energy should be taxed; rather, it should be classed as an essential item. The government, he added, is raking in extra revenue from VAT, due to higher prices, and then giving out small relief “as charity”.