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Fuel tourism revenue plummets
Economics

Fuel tourism revenue plummets

23.07.2015 From our online archive
The revenue from fuel sales in Luxembourg dropped significantly between the first half of 2015 and the same period last year, with some 96.7 million euros less in tax earnings.
21.11.07 erhoehte benzinpreise, benzin, fuel, oelpreise, oel, kraftstoff, tanken, verbrauch, tankstelle, photo: Marc Wilwert

(CS) The revenue from fuel sales in Luxembourg dropped significantly between the first half of 2015 and the same period last year, with some 96.7 million euros less in tax earnings.

While between January and June 2014, excise tax revenue from fuel sales was at 685.3 million euros, this dropped to 588.6 million euros for the first half of this year.

These numbers were revealed by Finance Minister Pierre Gramegna at a meeting of the parliament's finance and budget committee on Thursday.

As the main reason behind the decrease in tax income, the minister cited a drop in fuel sales, with the sale of diesel down 6.5 percent, while petrol sales decreased 7 percent.

Changes in fuel prices have led to Luxembourg losing some of its competitive edge in pricing, Gramegna explained, with Belgium, for example, offering discounts for lorry drivers.

Elsewhere, people's habits are changing, with more people opting for car-sharing or public transport, the minister added.

Gramegna also commented that it was too early to tell whether the days of fuel tourism in Luxembourg are numbered.

The fuel sector was not the only area that saw losses in revenue compared to last year, with income from tobacco products excise taxes decreasing by 11.5 million euros over the first six months of this year, compared to 2014, due mainly to an increase in VAT, Gramegna said.

While the losses compared to last year are already at over 100 million euros, in comparison to the amount of revenue budgeted for 2015 from excise taxes, actual income should be around 90 to 100 million euros below the forecast.

Outside of this unexpected development in the excise tax area, Gramegna said the budget was unfolding as planned, with 51 percent of expected revenue received over the first half of the year, as well as 50 percent of expenses spent.

Foreseen in the 2015 budget was also a 550 million euro loss in e-commerce VAT after a change in EU law that sees the tax paid in the country the product is ordered rather than the company's seat. That loss will be compensated to around 50 percent by the increase in Luxembourg VAT rates introduced at the start of 2015.