The green levy expected to be imposed on fuel prices in the coming months is anticipated to be low.
This levy, also known as the carbon tax on fuels and other products, is included in the prerequisites of the National Recovery Plan.
Minister of Finance Makis Keravnos, speaking to Phileleftheros, stated that the price increases due to the imposition of the green levy will be minimal.
“Any increases are not significant enough to impact final prices,” Mr. Keravnos emphasized.
The percentage of the tax to be imposed on fuels, as well as other energy products, is expected to be clarified soon.
Following the determination of the percentage, compensatory measures will be prepared to mitigate the impact on taxpayers. Besides the imposition of the green tax on fuels, citizens will also be required to pay special fees for water and household waste.
It is noted that the compensatory measures accompanying the green tax aim to make it budget-neutral.
The study conducted focused on the economic implications and econometric estimates of the tax on various income brackets and population groups with different characteristics.
Based on the terms regarding the Recovery Fund, the Republic has committed to implementing the measure in the first quarter of the year. However, a reliable source did not rule out the possibility of it being delayed by two months.
The draft legislation for the introduction of the carbon tax on fuels has already been prepared by the Ministry of Finance, which was sent to the Legal Service for legal review last December.
Subsequently, it will be submitted to the Council of Ministers for approval and is estimated to be presented to the Parliament by the end of March 2024.
Additionally, the completion of consultations on regulations for the introduction of environmental water fees is expected, which will also be sent to the Legal Service for legal review.
Furthermore, the Ministry of Agriculture is in the process of preparing the draft regulations for waste fees, which, once finalized, will undergo public consultation and then be sent for legal review. On Friday, March 1, the Center for Economic Research (CER) of the University of Cyprus and the Ministry of Finance will present the progress of the integrated tax transformation.
The CER has already begun consultations with social partners, professional associations, and other organized groups.