The House of Commons on Friday fast-tracked approval for the reduced tax rate of 1.5 crowns on diesel to remain in force until the end of next year, i.e., 2023, not this September as initially intended.

The measure is intended to help the competitiveness of smaller haulers in particular. Petrol is not affected by the current extension. The Senate will now take up the proposal. If approved, it will be put on the President’s desk.

“At the moment, it is not the high price of diesel, but the competitive environment. We have been negotiating for many months with the Transport Minister (Martin Kupka of the ODS-editor’s note) about the competitiveness of our carriers,” Finance Minister Zbyněk Stanjura (ODS) justified the proposal at the plenary session.

“The biggest competitors of our carriers, especially the smaller ones, are carriers from Poland, Slovakia, Hungary, and Romania,” said the head of the state treasury.

Initially, he and Kupka talked about a permanent reduction of excise duty on diesel, which was not approved by the cabinet. “It’s a good compromise between ending it and a permanent solution,” Stanjura said after Wednesday’s cabinet meeting.

Pirates abstained

The proposal was supported by MPs from across the political spectrum, including the opposition ANO and SPD parties. The exception was the ruling Pirates, who abstained in the vote.

According to the amendment, the reduced excise duty rate of 1.5 crowns on diesel will remain at 8.45 crowns per liter.

Petrol is not affected by the approved amendment on excise duties. Excise duty on this fuel will return from the current 11.34 crowns to the original 12.84 crowns per liter from October 1st this year.

The Ministry of Finance estimates the total negative impact of the measure on the budget at CZK 9.6 billion a year. The press release said that of this, about 8.7 billion would fall on the state budget and 0.9 billion on a budget of the State Transport Infrastructure Fund.

Source