Attention, VAT and excise are two different tax mechanisms. Excise duties represent a fixed amount of 60 centimes per liter (of diesel or petrol), regardless of the price at the pump. VAT, on the other hand, is calculated as a percentage: 21% of the price (excluding VAT) with the somewhat special feature that we also pay VAT… on excise duties.
What the government is planning
The federal government should, in the coming days, agree on an aid to be provided to consumers in the face of this surge in energy prices. Information taken from his cabinet, the Minister of Finance, Vincent van Peteghem (CD&V) proposes to lower the amount of excise duties to bring them into line with the minimum imposed by Europe (for petrol), ie 36 cents per litre. This proposal has yet to be considered by the Vivaldi coalition partners.
A potential drop of 30 cents on current prices
However, let’s do the math. By applying this level of excise duty to the diesel and by proportionally adapting the VAT, the price might go from €2.08 to €1.78 per litera reduction of 30 cents for the consumer. For gasolinesuch a reduction in excise duties would raise the current price of €1.99 to €1.70.
