Serbia proposes removing 20% cap on fuel excise tax cuts

Serbia's Ministry of Finance is moving to amend the Excise Law, a move that would remove the existing 20% limit on government-imposed reductions of excise taxes on fuel. The draft amendments are currently open for public consultation before moving to a formal hearing.

Under the current legislation, the government has the authority to temporarily lower excise duties on petroleum derivatives if global crude oil prices negatively impact the country's macroeconomic stability. However, these reductions are capped at 20% of the most recently published excise tax amounts. The proposed revision seeks to eliminate this ceiling, granting the government greater latitude in its fiscal response to market volatility.

The draft legislation also addresses adjustments for increases in crude oil prices and refines the mechanism for aligning dinar-denominated excise taxes on oil derivatives with the annual consumer price index. Currently, excise taxes on gasoline and diesel are 20% lower than the statutory amounts, a measure extended until August 2. This temporary reduction has been in place since March 13.

Previously, excise tax reductions sometimes exceeded 20%, necessitating specific government decrees, such as one issued under the Law on Trade to limit prices between April 10 and May 15, which allowed for a 25% reduction. The Ministry of Finance's decision to amend the Excise Law appears aimed at streamlining these adjustments and allowing for reductions greater than 20% when deemed necessary.

Public comments and suggestions regarding the draft amendments are being accepted by the Ministry of Finance until July 30, 2026. Submissions can be made via postal mail or email.