Serbia amending Excise Tax Law – There will be no 20% limit on excise tax reduction

The Serbian Ministry of Finance is working on amending the Excise Law, and the biggest change would be the abolition of the 20% limit on excise tax reduction - which is the maximum percentage by which the Government can reduce excise taxes in the event of a rise in the price of crude oil on the world market, N1 reported.

As stated, the Draft Law on Amendments to the Excise Tax Law has been published on the website of the Ministry of Finance, which is in the consultation phase preceding the public debate, and the changes compared to the current Excise Tax Law are in only one article - 17.

The existing law stipulates that “in the event of a rise in the price of crude oil on the world market, which negatively affects the macroeconomic stability in the country, the Government may temporarily reduce the amounts of excise taxes (...) determined in accordance with this law by the amounts by which the prices of those oil derivatives have increased, provided that this reduction cannot be greater than 20% of the latest published excise tax amounts.”

The proposed draft leaves it open to the Government to temporarily reduce excise duty amounts, while deleting the part stating that the reduction cannot exceed 20%, which means that, if necessary, excise duties can be reduced by more than 20 percent.

The part regarding the increase in excise duties in the event of a drop in the price of crude oil on the world market is also changed, and the method of harmonizing the dinar amounts of excise duties on petroleum derivatives with the annual consumer price index is specified.

Currently, excise duties on gasoline and diesel are 20% lower than the amounts prescribed by the Excise Tax Law and will remain so until August 2.

The Government of Serbia has extended the duration of the Decision on the temporary reduction of excise duties on petroleum derivatives, from July 26 to August 2.

The reduced excise duty on leaded gasoline is thus 61.24 dinars per liter, for unleaded gasoline 57.60 dinars per liter, while for diesel it is 59.23 dinars per liter.

The full excise tax amounts, according to the Excise Tax Law, are 76.55 dinars for leaded gasoline, 72 dinars for unleaded gasoline, and 74.04 for diesel.

The government has been reducing the excise tax amounts on gasoline and diesel since March 13 of this year.

At one point, they were reduced by more than 20%, which could not be regulated by the Decision on Temporary Reduction, because that is the maximum by law.

Thus, from April 10, until May 15, the reduction of excise taxes by 25% was regulated by another act - the Regulation on Limiting the Price of Petroleum Derivatives, based on the Law on Trade.

Ministarstvo finansija Republike Srbije

Ministry of Finance

Draft Law on Amendments to the Excise Tax Law

Excise Tax Law