Government extends ISP discount through summer

Portugal’s government has announced today that the discount on the Tax on Petroleum Products (ISP) – equivalent to a decrease in the VAT rate from 23% to 13% – will be maintained through July and August.

In a statement, the finance ministry said the government is renewing mitigation measures for the increase in fuel prices, and will thus end its weekly ‘updates’ of the tax.

According to the executive, the reduction in the tax burden equates to 28.2 cents per litre for diesel and 32.1 cents per litre for petrol.

The note also states that new measures targeting specific sectors of activity have also been approved.

“For the goods transport sector the Extraordinary Professional Diesel (GPE) mechanism has been created, through which 17 cents per litre will be reimbursed, up to a maximum of 8,500 litres in July and August,” while the 50% reduction in the Single Circulation Tax (IUC) for category D vehicles will be maintained.

Concerning the passenger transport sector, the Finance Ministry says that financial support for buses and taxis has been approved along lines granted in November 2021 and March 2022.

“For both sectors (goods and passengers), the extension for five years of the 120% increase in IRC on fuel costs is maintained (for those not benefiting from professional diesel), and the relaxation of payment of tax obligations (VAT and withholdings of personal and corporate income tax),” says the statement.

The decision also brings an increase in ISP discount for the agricultural sector, rising from 3.4 cents per litre of agricultural diesel to 6 cents per litre for July and August.

The situation will be “reassessed in August”.

Source: LUSA