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Croatia’s companies face taxes on fuel 23% higher than world average

61% taxes on petrol places Croatia among top 10 highest in study

Taxes comprise 59% of petrol fuel cost in Europe, compared to 50% of global average

European tax rates higher than other major economies including USA and Japan

 

Croatia’s companies face taxes as a percentage of the price of fuel on average 23% higher than the world average, putting them at a serious disadvantage and potentially slowing economic growth, shows a new study by UHY, the international accounting and consultancy network.

UHY explains that in Croatia on average taxes comprise 61% of the cost of the price of petrol and 57% of the cost of the price of diesel. This compares to the global averages of 50% and 44% respectively.

Taxes amount to 60% of the cost of diesel in the UK, the highest in the study, and 53% of the cost in Germany.

In many major economies outside of Europe, taxes make up significantly lower proportions of the price of petrol and diesel, including:

    - Japan, where 42% of the cost of petrol and 33% the cost of diesel is from tax

    - Canada, with taxes making up 35% of the cost of petrol and 32% of diesel   

    - United States**, where taxes comprise 17% of the cost of petrol and 18% of diesel

Higher fuel taxes means that the cost of filling the tank*** of a Ford Transit van with petrol in Europe – indicative of a typical business expense – amounts to USD$135 on average and USD133 in Croatia. This compares to a global average of USD$111.

UHY explains that higher fuel duties and taxes in Europe are the main contributor to higher fuel prices for petrol, diesel and Liquefied Petroleum Gas.

The cost of filling a tank of a Ford Transit with diesel is 24% higher on average in European countries and 29% higher in Croatia. As diesel is used in the majority of commercial vehicles, this heavy burden is borne primarily by businesses.

It is also 2% more expensive in Europe and 77% more expensive in Croatia for Liquefied Petroleum Gas (LPG), a more environmentally-friendly alternative to petrol or diesel.

Helena Budiša, partner from UHY in Croatia, comments: “Higher fuel taxes hit almost all businesses, and they can ultimately impede economic growth in Croatia.”

“While Croatia is bound by the mandatory minimum level of excise duty prescribed by the EU, the level the Government charges is much higher than the threshold. This ultimately pushes up prices for the consumer and end user.”

“Many European companies have mechanisms and tax credits available to help lower the end price of fuel for consumers. The Government should consider what initiatives it can consider.”

“Governments can consider initiatives such as freezing fuel duties or even cutting the rates. There needs to be greater international cooperation to ensure there is not too much discrepancy in fuel prices between different countries.”

“For any government, taxes on petrol and diesel are a key tool for helping to cut greenhouse gas emissions and can be used to fund infrastructure spending. However, for businesses, especially small and medium enterprises (SMEs), they can represent a significant operating cost, especially in the retail and distribution sectors.”

“There needs to be a balance to ensure fuel and tax costs do not become prohibitive. The relatively lower rates in major developed economies, most notably Canada, compared to its international competitors in Europe shows that a balance can be struck.”

UHY studied fuel taxes and prices in 24 countries around the world, looking at the cost of petrol, diesel and LPG/Autogas and the percentage of the price that came from tax.

France ranked the highest for tax comprising the largest percentage of the total price of petrol – 64%. Denmark ranked the most expensive in the UHY study for the overall cost of filling a tank with petrol – costing USD$160.

Filling the tank of a Ford Transit with petrol: breakdown of cost of fuel and tax

Rank

Country

Tax
USD

Cost of
petrol
USD

Total Cost
USD

Tax as a percentage of total cost

1

France

91.27

52.44

143.71

63.51%

2

Italy

95.23

56.84

152.07

62.62%

3

UK

83.20

52.00

135.20

61.54%

4

Croatia

81.60

51.20

132.80

61.44%

5

Germany

82.42

52.78

135.20

60.96%

6

Spain

71.68

46.46

118.14

60.00%

7

Rep. of Ireland

82.42

55.18

137.60

59.90%

-

Europe average

79.16

55.61

134.77

58.73%

8

Denmark

90.27

69.42

159.69

56.53%

-

G7 average

62.67

54.71

117.38

53.39%

9

Portugal

78.44

68.98

147.42

53.21%

10

Romania

56.98

52.12

109.10

52.00%

11

Poland

57.20

54.31

111.51

51.30%

-

World average

55.19

55.67

110.86

49.79%

12

India

43.84

50.03

93.87

46.70%

13

Vietnam

32.92

42.19

75.11

43.80%

14

Japan

46.20

63.70

109.90

42.02%

15

Uruguay

56.41

84.41

140.82

40.06%

16

Mexico

34.16

51.24

85.40

40.00%

17

Russia

20.52

34.68

55.20

37.00%

18

Australia

31.44

56.56

88.00

35.72%

19

New Zealand

41.37

76.60

117.97

35.00%

20

Canada

30.00

55.00

85.00

35.00%

21

Zambia

33.09

75.76

108.85

30.39%

22

Pakistan

18.44

47.56

66.00

28.14%

23

USA

10.38

50.23

60.61

17.12%

24

China

0.00

91.56

91.56

0.00%

 

Filling the tank of a Ford Transit with diesel: breakdown of cost of fuel and tax

Rank

Country

Tax
USD

Cost of
diesel
USD

Total Cost
USD

Tax as a percentage of total cost

1

United Kingdom

84.00

55.20

139.20

60.34%

2

Italy

82.93

57.96

140.89

58.86%

3

Croatia

71.28

54.32

125.60

56.75%

4

Republic of Ireland

70.57

55.83

126.40

55.83%

5

Germany

62.76

55.64

118.40

53.01%

-

Europe average

65.59

60.54

126.14

52.00%

6

Spain

59.45

54.00

113.45

52.00%

7

Denmark

67.63

72.04

139.67

48.42%

8

Romania

55.24

60.26

115.50

48.00%

9

Poland

50.90

55.59

106.49

47.80%

-

G7 average

51.00

59.09

110.08

46.32%

10

Portugal

56.43

69.57

126.00

44.79%

11

France

60.34

75.58

135.92

44.40%

-

World average

44.55

56.78

101.33

43.96%

12

Mexico

30.70

46.05

76.75

40.00%

13

New Zealand

32.98

51.44

84.42

39.00%

14

Vietnam

23.56

38.06

61.62

38.20%

15

Pakistan

29.75

49.25

79.00

37.88%

16

India

30.25

50.81

81.06

37.32%

17

Australia

32.05

59.15

91.20

35.14%

18

Japan

30.30

61.10

91.40

33.12%

19

Canada

25.00

54.00

79.00

32.00%

20

Russia

16.82

39.18

56.00

30.00%

21

Zambia

20.18

75.29

95.47

21.14%

22

Uruguay

19.80

83.73

103.53

19.12%

23

United States

11.64

54.13

65.77

17.70%

24

China

0.00

79.20

79.20

0.00%

 

Filling the tank of a Ford Transit with Liquefied Petroleum Gas (LPG): breakdown of cost of fuel and tax

Rank

Country

Tax
USD

Cost of
LPG
USD

Total Cost
USD

Tax as a percentage of total cost

1

Croatia

25.93

29.51

55.44

46.77%

2

Poland

20.56

22.46

43.02

41.00%

3

United Kingdom

24.48

35.28

59.76

40.96%

4

Italy

22.56

34.13

56.69

39.79%

5

Canada

17.00

32.00

49.00

35.00%

-

G7 average

18.47

37.63

56.11

32.93%

6

Germany

16.07

33.41

49.48

32.48%

-

Europe average

18.52

38.93

57.45

32.24%

7

Romania

12.58

32.28

44.86

28.00%

-

World average

14.83

41.34

56.17

26.40%

8

Russia

6.68

19.31

25.99

25.00%

9

Australia

11.82

37.14

48.96

24.14%

10

Spain

19.24

62.44

81.68

24.00%

11

Portugal

12.99

43.49

56.48

23.00%

12

India

10.69

36.81

47.50

22.50%

13

Uruguay

9.99

42.26

52.25

19.12%

14

France

12.26

57.36

69.62

18.00%

15

Vietnam

8.63

86.31

94.94

9.10%

16

New Zealand

5.82

61.39

67.21

9.00%

*EU countries

**US figures based on averages across US states

***Tank size: 80 litres for petrol and diesel, 72 litres for LPG

****Tax rates include VAT, some or all of which may be reclaimed by businesses in some countries, including EU member states

Partners in Croatia

UHY Ekonom d.o.o.

Rudan d.o.o.

UHY Savjetovanje d.o.o.

UHY Trening Centar

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