Immediately removing the 20 cents per litre fuel tax would leave a $56 million hole in State revenue, says Attorney-General Aiyaz Sayed-Khaiyum.
He revealed this as he labelled the call by National Federation Party leader Professor Biman Prasad for the tax to be abolished as “stupendously stupid”.
He, however, said if tourist arrivals resulted in a hike in revenue, Government would relook at the issue.
During a debate on the Customs Tariff Amendment Bill 2021, Prof Prasad had called on Government to show compassion and fulfil its obligatory social responsibility by immediately removing the tax which had been imposed since April 1 last year.
“The extra fuel tax is now having a crippling effect due to the escalating price of fuel following the latest hike from yesterday (Wednesday),” the NFP leader said.
Prof Prasad said on March 26 last year, while delivering the COVID-19 Response Budget, the A-G justified the imposition of the 20 cents per litre tax but now that prices had increased, it was only fair that the tax be removed. The A-G said if the economy improved as tourist arrivals increased, Government would relook at the fuel tax.
“We present to Parliament a budget, we have our expenditure, we have our revenue source, it is a very basic fundamental understanding of governance,” he said.
“If we say ‘let’s take away the 20 cents’, it immediately puts a $56 million hole in revenue collection.
“Parliament has approved the appropriation, we have to stick to the appropriation.
“If we are going to remove a $56m revenue, suddenly certain things have to be cut off.”
