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European companies face taxes on fuel 18% higher than world average. Romania is above the global indicator
European companies face taxes as a percentage of the price of fuel on average 18% higher than the world average, putting them at a serious disadvantage and potentially risking economic growth, shows a new study by UHY, the international accounting and consultancy network, romaniajournal.ro informs.
UHY explains that on average taxes comprise 59% of the cost of the price of petrol and 52% of the cost of the price of diesel, compared to the global averages of 50% and 44% respectively.
Taxes amount to 60% of the cost of diesel in the UK, the highest in the study, and 53% of the cost in Germany.
In many major economies outside of Europe, taxes make up significantly lower proportions of the price of petrol and diesel, including:
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Japan, where 42% of the cost of petrol and 33% the cost of diesel is from tax
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Canada, with taxes making up 35% of the cost of petrol and 32% of diesel
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United States, where taxes comprise 17% of the cost of petrol and 18% of diesel
UHY explains that higher fuel duties and taxes in Europe are the main contributor to higher fuel prices for petrol, diesel and Liquefied Petroleum Gas.
The cost of filling a tank of a Ford Transit with diesel is 24% higher on average in European countries. As diesel is used in the majority of commercial vehicles, this heavy burden is borne primarily by businesses.
It is also 2% more expensive in Europe for Liquefied Petroleum Gas (LPG), a more environmentally-friendly alternative to petrol or diesel.
Romania: Taxes on petrol – 52%, on diesel – 48%
The taxes in Romania represent 52% of the petrol price and 48% of the diesel, thus placing the country in the Top 10 of countries with the highest level of taxation on this segment.
The world averages are 50% and 44% respectively.
UHY also informs that the price of Liquefied Petroleum Gas is by 2% more expensive in Europe and by 6% in Romania, although it is a more ecological alternative to diesel and petrol.
Managing Partner with UHY Audit CD in Romania, Camelia Dobre, quoted by digi24.ro, says that “taxes on fuel affect almost every company and, eventually, may prevent the economic growth in Romania. The proposal of Finance Minister, Eugen Teodorovici, to repeal the over-excise duty on fuel could be useful for the companies in Romania. According to our survey, they already pay on average higher costs as taxes in the fuel price, as compared to most international competitions. For any government, the taxes on diesel and petrol are a key instrument meant to cut the greenhouse gas emissions and may be used to fund the infrastructure expenditures. Nevertheless, mainly for the SMEs, such taxes may represent a significant operational cost, especially for retail and distribution. There should be a balance in order to ensure that these costs and taxes on fuel do not become restrictive. Lower levels of taxation in developed countries, such as Canada, as compared to international competitors in Europe, are a proof that such a balance could be reached.”