Change in fuel tax rates and electric car subsidy in Hungary
Fuel tax amendment
According to a new law on taxes which was adopted by the Parliament in June 2016, as of 1 September 2016, if the market price of the oil exceeds USD 50/barrel, then the applicable excise duty of fuels will be modified as follows:
- Unleaded petrol – HUF 120,000/thousand litre,
- Diesel oil – HUF 110,350/thousand litre.
If the market price of the oil does not exceed USD 50/barrel, then the applicable excise duty of fuels will be modified as follows:
- Unleaded petrol – HUF 125,000/thousand litre,
- Diesel oil – HUF 120,350/thousand litre.
According to the government, the amendment is aimed at stabilising the budget revenue and increasing the significance of consumption taxes. The applicable excise duty is to be reviewed by the government on a periodic basis.
The excise duty refund applied to gas oil used for commercial or agricultural purposes will be increased by the same amount as the applicable excise duty rate of gas oil. As the market price of oil was below USD 50, the government raised the fuel taxes this October. As a result, diesel tax is now only 1.6c lower than petrol tax.
Hungary also has commercial diesel, which means that for trucks 5.5c is reimbursed from the diesel tax they pay.
Subsidy for buying electric cars
The Hungarian government just published a call for applications for grants from all those who wish to buy a new electric car. The maximum subsidy will be about EUR 5000 per car. Individuals as well as companies and institutions can apply. The total sum allocated will be enough to subsidise the purchase of about 1300 cars.
The NGO Clean Air Action Group (member organisation of Green Budget Europe) expressed doubts about the usefulness of such a subsidy, stating that public money could be used much better for other purposes than subsidising a few rich people, who could probably afford to buy an electric car even without the subsidy. CAAG has been advocating that the government support e-car sharing and purchase of e-cars for public services, like social workers, as well as promoting the use of light electric vehicles and e-buses.
András Lukács, President, Clean Air Action Group, Hungary