Grenada removes all taxes on petrol
The Government of Grenada has removed all taxes on petrol. This means that retailers and consumers will not be required to pay any taxes on petrol, which is defined by law as gasoline and diesel, until December 2022.
According to a Petrol Tax Order issued in the Government Gazette on 16 September 2022 and signed by Finance Minister Prime Minister Dickon Mitchell, the petrol tax rate for importers are zero dollars and zero cents.
“There shall be charged and paid by an importer of petrol to the Comptroller of Customs a tax of zero dollars and zero cents on each gallon of petrol imported into the State for local consumption,” stated the Order which the Minister made on 14 September 2022.
The Order was issued by the Minister in accordance with Section 4 of the Petrol Tax Act. This clause grants the Minister of Finance the ability to change the gasoline tax rate without the legislature’s agreement. According to the gasoline tax law, only importers are required to pay the gasoline tax. The retailers purchase gasoline at the wholesale price, which includes the gasoline tax, and then add their profit margin before selling to consumers.
“With the reduction in the Petrol Tax to $0.00, the government will not collect any petrol tax until this is amended. Under the cap, the statutory tax rate did not change, but the Government was applying fewer taxes to maintain the cap at $15,” explained an official at the Ministry of Finance.
The government is projected to lose millions in gasoline tax revenue unless the gasoline tax rate changes.
Due to rising prices on the international market, the then-New National Party (NNP) cabinet established the EC$15 gasoline ceiling in December 2021. However, the price of fuel has decreased in recent months, resulting in cheaper costs in the local market.
During a news conference on 13 September 2022, Prime Minister Mitchell stated that if the price of fuel rose above EC$17 following the removal of the restriction on 18 September, the government would impose a new cap of EC$17.