PROVIDED there is no reduction in state income, the Communications’ Ministry has no objection with the transfer of road tax to fuel prices, Minister Haris Thrasou informed the House Communications’ Committee yesterday.
According to data submitted by the Finance Ministry, road tax had boosted state economy by £45 million in 2004. Annual fuel consumption amounts to 774 million litres.
“If there is a way,” said Thrasou, “for the state to receive this money (£45 million), then we have no objections on the realisation of this system, provided it doesn’t create a reduction in state income.”
The Minister added, “We agree with the philosophy of the bill which has been drawn up and it is a matter of working with the numbers. You can express all the opinions you want here, but the numbers can not be altered.”
AKEL Deputy Giorgos Hadjigeorgiou told the Committee that since discussions began on the matter, his party had supported that “the definitive factor for us to be in favour of the transfer of road tax to fuel prices was the amount of tax that would be added to fuel.”
When the government’s study had been submitted to Parliament, whereby fuel duties would reach six cents per litre, “we said that this was an excessive amount, and considering the fact that fuel prices are already high, would create serious problems for consumers as well as the economy,” Georgiou added.
“Then came the proposal by DIKO Deputy Nicos Pittokopitis, which with various estimations showed that with three cents per litre, the government would be able to receive the same amount of income as it did through road tax.”
But after hearing the information submitted by the Finance and Communications Ministries, Hadjigeorgiou commented “the DIKO proposal is lacking logistically”.
He added that taking into consideration the annual 774 million litres of fuel consumption, the amount the government stands to collect with three cents a litre is £27-28million. Which means it will reduce state income by £17million; something the government will not accept.
Giorgos Varnava of EDEK commented that when the proposal was in its initial stages, his party had its reservations. But when Pittokopitis told the Committee last week that fuel duties were to be at three cents per litre, EDEK was willing to discuss the bill.
But at the end of the day, after seeing the official statistics submitted by the two Ministries, said Varnava, DIKO’s proposal does not mathematically add up to the £45 million the state receives each year through road tax.
“This leads with mathematical precision to the conclusion that if the decision is made to abolish road tax, then the amount that will have to be transferred to fuel prices will have to be around 5.5 to six cents per litre,” he continued. “And this is the initial proposal, which we as EDEK will not discuss and do not accept”.
DISY Deputy Georgios Georgiou requested that all members of the Committee are given the study carried out by DIKO so they can compare and examine the figures and estimates.
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