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Govt Scraps Energy Excise Hike Planned for November

Ljubljana, 22 September (STA) - The government has responded to calls from business regarding energy costs, announcing on Tuesday changes to the excise duty act that will keep excise duty on electricity at present level after 1 November when a rise had been planned. Yet the Chamber of Commerce and Industry (GZS) feels the government needs to do more.

The government announced it would not enact the major hike announced for November and keep excise duties at current level, including a 50% discount in place now, after discussing on Tuesday with the GZS a competitiveness impact study that had been conducted by the chamber in relation to the higher duties.

The GZS, which decided for the study after the first phase of the hike was enforced in August, said in a press release today that the analysis clearly demonstrated the serious negative effects of the higher excise duties, especially after November, on companies' competitiveness.

Finance Ministry State Secretary Mateja Vranicar expressed understanding for the worries of the GZS, explaining that the ministry had drawn up a solution that was much kinder than the excise duties act adopted in July.

Looking for additional sources to patch up the budget, the government raised duties on electricity from EUR 1 per MWh to EUR 6.05 on 1 August while a second increase to EUR 12.01 was scheduled for 1 November. Excise on gas meanwhile increased from 0.63 cent to 3.63 cent per cubic metre. A 50% discount is currently in place.

The new law will scrap the November hike and allow for additional cuts of up to 50% in case this will be made possible during the implementation of the 2011 budget, Vranicar announced.

In order to find a better and lasting solution for the future, the ministry has meanwhile proposed setting up a mixed working group that would also include representatives of the GZS and the Economy Ministry to draw up a excise refunds system for companies based on the Austrian or German model.

Given the complexity of the model, the need to test it and the legislative procedure that also involves EU bodies, it is not realistic to expect such a law before 2012, the secretary explained.

The GZS welcomed the government's move, but said that much more needs to be done. The chamber will insist that the government has the responsibility to provide conditions that will be comparable to those that the competition has abroad.

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