MPs reject conditional abolition of road tax

Members of the parliamentary committees of Finance and Communications rejected Tuesday the conditional abolition of the six-monthly or annual circulation tax that would have seen retail fuel prices raised by as much as 6.3 cents a litre.

The joint committee meeting heard the first of the government’s three proposals on the issue, presented by Communications Ministry Permanent Secretary Makis Constantinides and Road Transport Dept. Deputy Director Soteris Nikoletas.

House Finance Committee Chairman Aristos Chrysostomou of DIKO said he considered the new surcharge as “unacceptable”.

Transport Committee Chairman Nicos Pittokopitis, also of DIKO, said that he would see a levy of 3c a litre as more reasonable, while he argued that the benefits for the state from the abolition of the circulation tax would be greater, as it costs the state CYP 7 per road tax issued, while a further 80,000 cars roamed the streets without any tax in their window.

Opposition DISY Vice President Lefteris Christoforou described the proposed fuel hikes as “ludicrous” and that the Democratic Party would submit its own proposal suggesting the unconditional abolition of the road tax.

DISY deputies had also proposed that the 11.3 cents a litre tax on heating fuel also be reduced to 1.4c, which was rejected last Thursday and compromised with a 3c reduction in the levy that saw heating fuel lowered Tuesday to 43.3c a litre.

Petrolina already proceeded with reducing its pump prices for 95-octane and 98-octane unleaded petrol by 1.6 cents to 51.9c and 54.3c a litre, respectively.

Government spokesman Kypros Chrysostomides said the state was already losing some CYP 6 mln from the cut in the heating fuel levy, while DISY’s Christoforou substantiated his party’s claims of the state cashing in about a million pounds a day by quoting Finance Minister Sarris who said last week that state revenue from the fuel taxes hd risen from CYP 40 mln in 2001 to CYP 250 mln in 2005.