Balance the accounts Government finances maneuvering with oil High fuel prices, given the budget law, also brings new valuable revenues to the State coffers thanks to the “double tax”: hence the promise to lower excise taxes. What happened to the mobile excise tax and why wasn’t it taken to reduce drivers’ costs?

The funds available to the Meloni government for the 2024 maneuver are not very large, but help could come from fuels. In fact, gasoline and diesel prices continue to rise, and the state’s revenue from VAT and special consumption taxes continues to increase. These resources will be of fundamental importance to the budget law, which the Prime Minister himself is working on and calls for using these resources with “maximum care”.

The priorities are stable: increasing salaries with the approval of the tax wedge cut and, in the words of Giorgia Meloni, “supporting growth, helping the weakest groups and giving momentum to the producers”. The active “double tax” on fuel in Italy will help build the budget package and explains why it is difficult, if not impossible, to deliver on the election promise to lower excise duties on fuel. Prices could have been cooled by the “mobile excise tax”, but that didn’t rise either: let’s try to understand all the reasons for the story.

(hard) calculations for the 2024 maneuver

The Meloni government grapples with the second budget law. Following the budget package approved in December 2022, in which the cost of support for businesses and citizens aggravated due to increases in energy prices, it was said that the 2024 budget package would be more “identical” with centre-specific reforms and economic measures. The right on which the election campaign is built: flat tax, pensions, strait bridge, tax reform and salary increases, above all.

In reality it will not be possible to deliver on election promises and we will have to focus on verifying the system currently in place. The list is long and expensive: approval of quota 103, a single check, a reduction in the tax wedge and a tax cut on employee productivity bonuses, as well as maternity bonuses and contract renewals for government employees.

In summary, the next budget law will be a duplicate of the previous one, the funds we have do not allow us to do anything else. The guest of the Rimini Meeting, Minister of Economy and Finance Giancarlo Giorgetti (Lega), underlined some of the difficulties in finding funds and stated that the 2024 Budget law would be a “complex maneuver” and “one that you cannot do”. everything.”

Everything will become clearer in Def’s Update Note Nadef, the Economic and Financial Document published last April, which will lay the economic foundations on which the 2024 budget maneuver will be based. Taking into account deficit targets and current revenues, the government needs to raise between 25 and 30 billion euros.

The “treasure” of excise taxes: this is why they are not deducted

Speaking of income, the excise tax on fuel is an important item for the state budget. In 2022, the Draghi government cut gasoline and diesel by more than 34 percent (about 25 cents per liter) to deal with price increases caused by the war in Ukraine. Cost: about 7 billion euros. The Meloni government first reduced the cut, then eliminated it, bringing back “old” fuel taxes.

After a decline from peaks in 2022, prices began to rise again in mid-2023, and the government intervened with a decree requiring gas stations to display the average dues price, concentrating on alleged “speculations” about convenience stores and gas stations. area. However, this measure could not prevent prices from rising, and for this reason, a new cut in excise taxes, which is one of the most publicized election promises of the centre-right, is persistently talked about.

Gasoline and diesel prices in Italy in August 2023 according to Mase chart

In the past, Prime Minister Giorgia Meloni has attacked governments for fuel taxes, while government ally Matteo Salvini announced in 2018 that the “seven excise taxes” were cut in video. The league has not existed for decades.


According to Adolfo Urso, Minister of Business and Made in Italy, proposing cuts in excise taxes would cost around $12 billion a year, which is the bulk of the funds for the next budget law. In general, excise taxes are an important source of revenue for government coffers and guarantees, $20 to $26 billion a year. It’s not easy to cut, let alone eliminate.

It is understood that the increase in fuel prices allows the State to increase its revenues: According to the Ministry of Economy and Finance data processed by Today.it, the special consumption taxes applied to energy products in the first six months of 2023 provided all the revenues of the treasury. That’s just under 11 billion euros, compared to 9.6 billion euros in 2021, which is comparable given the Draghi government’s 2022 cuts. And between now and the end of the year, prices will bring extra revenue into the state coffers, not just thanks to excise taxes.

Double tax on fuel: What happened to mobile SCT?

Given that the final price paid at the gas pump is not just excise taxes, the fuel tax can be considered “double”: in fact, we have to take into account the 22 percent VAT paid on the fuel pump. on the industrial price as well as on excise taxes. Twice exactly. And these two components weigh in: According to recent surveys by the Ministry of Environment and Energy Security, VAT and excise taxes account for more than 55 percent of the price of oil, and 51 percent of the price of oil, as can be seen in the chart below. your diesel.

Weight of SCT and VAT on gasoline and diesel

Fuel taxes overall make Italy one of the most expensive countries to refuel with petrol and diesel: only Finland, Sweden, Denmark and the Netherlands are worse off, as can be seen from the chart by Today.it.

Where petrol and diesel are most expensive in Europe in 2023: price comparison with Italy

To deal with the new price hikes, the Meloni government had reformed a rule called the “mobile excise tax” introduced in the 2008 fiscal law, with the “Transparency” decree passed in January 2023.

The mechanism allows the State to waive the “double tax” on fuel and not collect VAT on excise taxes only if the average price of the Brent index over the previous two months is higher than the fixed reference. Burial price is 82.3 dollars per barrel. According to Today.it’s calculations, the average price of Brent over the last two months was $77.4 a barrel, slightly above the threshold stated in Def.

Gas bonus: the low-income card hypothesis

Another note is added to the government decree, taking into account “the possible decrease in price on the average of the four months before the adoption of the same decree” […] The text in the Official Gazette states, “compared to that stated in the last economic-financial planning document submitted. However, the mechanism is not an automatism, it is certainly a possibility and depends on the preferences of the government.

Brent’s price was also higher this quarter than Def’s 2023 forecast, but the mobile excise tax was not passed, and by the end of the year the government could find itself with a welcome amount of several billion euros more than expected. Thanks to SCT and also VAT. That’s why reducing fuel taxes isn’t easy, and it’s for these reasons that gasoline and diesel prices could make the Meloni government’s next budget bill less complicated.

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Source: Today IT

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