Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure PT-2021-43/2889 – Updated – measures in Portugal
Country | Portugal , applies nationwide |
Time period | Temporary, 21 October 2021 – 05 June 2023 |
Context | COVID-19, War in Ukraine |
Type | Legislations or other statutory regulations |
Category |
Promoting the economic, labour market and social recovery into a green future
– Support for fuel expenses |
Author | Ana Teixeira - CESIS |
Measure added | 14 September 2022 (updated 10 July 2023) |
The Portuguese government issued a set of measures to support families and consumers amid the rising prices of fuel and other energy products, as a consequence of the COVID-19 pandemic and the war in Ukraine.
This measure adjusts the tax on petroleum products (ISP), specifically unleaded gasoline and diesel, according to the excess fiscal revenue obtained through VAT applied to fuel. In order to compensate consumers for the increased price of fuel, the measure reduces the excess revenue by lowering the tax on petroleum products. Unlike the VAT which is a variable tax, the ISP is a fixed cost tax.
According to the newspaper Diário de Notícias (Diário de Notícias, 8 March 2022), the measure was announced at the end of a meeting with the National Social Partners group (Concertação Social). Because the tax is fixed, it requires a weekly review in order to ensure its correlation with the price of petroleum.
Ordinance 208-A/2021 of 15 October is the first amendment of the original Ordinance 301-A/2018 of 23 November. This ordinance sets the value of the unit rates of the tax on petroleum and energy products (ISP). In the Ordinance 208-A/2021 of 15 October the government introduced a reduction in the tax rate on gasoline and diesel temporarily. The tax will be reduced by a unit value of 2 cents per litre and 1 cent per litre, respectively, in order to ensure that the additional gain in VAT arising from the increase in fuel prices is fully returned to consumers through a proportional reduction in ISP unit rates. The measure will be subject to constant monitoring to ensure that it adjusts according to market developments.
Ordinance 208-A/2021 of 15 October was amended by Ordinance 63-A/2022 of 31 January. This change establishes an updated value of the unit rates of the tax on petroleum and energy products (ISP). Ordinance 208-A/2021 and 63-A/2022 were revoked on 14 March 2022 by Ordinance 111-A/2022 when the government decided to maintain the ISP reduction. That ordinance determined the temporary implementation of a weekly mechanism to review and fix the values of the unit rates of the tax on unleaded gasoline and diesel.
Ordinance 11-A/2022 is maintained in force by a set of Ordinances that revise and update the values of the tax rates on petroleum and energy products on a regular basis. The latest update was done through the Ordinance 217-B/2022 of 31 August.
On 5 September 2022 the government announced that the reduction in the tax rate on petroleum products (ISP) will continue until the end of the year (Government Press Release, 5 September 2022).
The following updates to this measure have been made after it came into effect.
01 May 2023 |
According to a Press Release issued by the Government on 28 April 2023, the measures to mitigate the rise in fuel prices remain in place for the month of May, with the Government continuing to support all consumers through a reduction in fuel taxes. The measures in question are:
Order 113-B/2023 defines 5 June as the end date for this temporary measure, extending it from it's previous end date of 31 December 2022. |
No information to date.
Workers | Businesses | Citizens |
---|---|---|
Does not apply to workers | Does not apply to businesses | Applies to all citizens |
Actors | Funding |
---|---|
National government
|
National funds
|
Social partners' role in designing the measure and form of involvement:
Trade unions | Employers' organisations | |
---|---|---|
Role | Informed | Informed |
Form | Not applicable | Not applicable |
Social partners' role in the implementation, monitoring and assessment phase:
No involvement of social partners in the implementation and monitoring of the measure.
According to Jornal de Negócios (Jornal de Negócios, 8 March 2022), the government met with the Social Partners before the launching the ISP reduction measure. The representative of the Business Confederation was satisfied with the measures. The representative of the union General Confederation of Portuguese Workers (CGTP) was concerned by the fact that the measures were more directed at businesses than families. |The General Union of Workers' representative was concerned about guarantees with the refugees' life conditions.
The social partners will participate in weekly meetings with a consultative committee to address the impacts of the war in Ukraine on the price of petroleum.
Citation
Eurofound (2022), Adjustment of the Tax on Petroleum and Energy Products for citizens, measure PT-2021-43/2889 (measures in Portugal), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/PT-2021-43_2889.html
Share
30 January 2023
Governments across the EU continue to implement policies to support citizens and businesses in the face of rising food and energy prices caused by the COVID-19 crisis and intensified by the war in Ukraine. This article summarises the policy responses as reported in Eurofound's EU PolicyWatch database from January to September 2022.
Article12 September 2022
Although the worldwide pandemic situation had already disrupted supply chains and triggered increases in energy and food prices in 2021, the situation deteriorated in 2022 with the Russian invasion of Ukraine.
Article12 September 2022
This article summarises the first policy responses that governments across the EU have started to implement to support companies affected by the rising prices, and those with commercial ties to Ukraine, Russia or Belarus.
Article5 July 2022
This article summarises the first policy responses of EU Member States, including those of the social partners and other civil society actors, enabling refugees to exercise their rights under the Temporary Protection Directive.
ArticleDisclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.