by Linda Straker
- Petrol tax was suspended in September 2022
- Petrol Tax Rate reinstated from 18 January 2023 increasing petrol by EC$3.50 per gallon
- Petrol Tax revenue is third largest income for Government
The Dickon Mitchell administration has reinstated the Petrol Tax Rate and as a result, EC$3.50 will be added to each gallon of petrol sold as of 18 January 2023. The petrol tax was suspended in September 2022.
“There shall be charged and paid by an importer of petrol to the Comptroller of Customs a tax of $3.50 on each gallon of petrol imported into the State for local consumption,” said Statutory Rules and Orders No. 2 of 2023 which was published in an extraordinary issue of the Government Gazette published on 16 January 2023.
Signed by Prime Minister Dickon Mitchell, the Minister for Finance, the Order is guided by Section 4 of the Petrol Tax Act. That section gives the Minister for Finance the authority to adjust the petrol tax rate without seeking Parliament’s approval. Under the Petrol Tax legislation, only the importers are required to pay petrol tax. The retailers buy at the wholesale price inclusive of petrol tax, add their margin and sell to buyers.
Petrol Tax revenue is the third largest income for the Government. According to the 2023 estimates of Revenue and Expenditure, the Government has projected that it will earn more than EC$45 million in petrol tax for the year 2023. A new petrol price structure is set to effect as of 18 January 18.
The increase in petrol tax is one of several tax or levy measures that will be enforced during the first quarter of 2023. Effective 1 February 2023, there will be an increase in the excise tax on alcohol from $1.10 and $4.40 per litre, to $1.50 and $5.00 per litre. The excise tax on cigarettes rises from 105% to 200%.
1 February will also see an increase in the VAT on carbonated beverages, soft drinks/sodas, and drinks with high sugar content from 15% to 20% and reinstating the environmental levy rate on electricity consumption and on water use. That same day will see Government offices adapting to a “no-printing of more than 5 pages policy” across the Public Service.