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Excise tax on fuel would increase by 2c per litre to partially finance a scheme for people to invest in solar water heaters and alternative energy technologies, Finance Minister Tonio Fenech said yesterday.
He also announced increases in the price of tobacco products and a rebate on treadmill purchases to incentivise healthy living.
Excise tax on cigarettes and tobacco products rose by six and eight per cent respectively. This means an average priced packet of cigarettes will cost an additional 20c.
As in previous years, the excise tax on the price of cement also increased by €5 per tonne. This increase will be directed towards financing alternative energy schemes.
The excise tax on fuel had also been raised in the 2009 and 2011 budgets, with an increase of 4c1 per litre for petrol and 2c4 per litre for diesel in the former and a 3c increase across the board in the latter.
A rebate on treadmills to incentivise healthy living
In announcing the new tax increases, Mr Fenech said this would finance another measure to entice more people to invest in solar water heaters and photovoltaic panels.
Mr Fenech said the Government was extending the scheme to help families get rid of their electricity-guzzling water heater and replace it with one that uses solar power to heat water.
He said the subsidy was increasing to 40 per cent of the cost of the unit up to a maximum of €400.
He also announced a 15.25 per cent rebate, up to €1,000, on double glazing and roof insulation to encourage families to invest in energy conservation and reduce dependency on electricity.
The cost of fuel has always been a point of contention, with Enemalta revising the price of petrol and diesel at the end of every month, according to how much it would have purchased the fuel.
According to a European Commission report, Malta has the fifth lowest tax-take from petrol and the fourth lowest tax-take from diesel in the eurozone.
In its effort to continue driving home the polluter pays principle, the Government raised excise tax by €5 for every tonne of cement.
This measure, along with the increase in the tax on fuel, is expected to deal a further blow to the construction industry following the drastic increases in the fee to file applications with the Malta Environment and Planning Authority.
When the tax on cement was increased in the 2012 Budget, the Malta Developers’ Association had said this would continue to increase the cost of construction at a time when the industry was experiencing a downturn.