Editorial|Editorial
The cost of the tax cut would quickly be in the billions for the state. It would be an income transfer for the well-off and would ultimately benefit Russia as well.
Finns the pain sweat at the gas pump has increased over the summer. At present, 95-octane petrol costs about two and a half euros per liter, which is almost a euro more than a year ago. The situation is terrible for many: the cost of long-distance commuting has risen by hundreds of euros a month at worst.
Many countries have reduced the taxation of petrol, and the same demands have been heard in Finland. It is true that petrol is currently expensive in Finland by European standards, but other prices have also risen. If the price of petrol is proportional to purchasing power, Finland will fall off the top.
Gasoline has not become more expensive due to Finnish tax policy but because of the war of aggression launched by Russia. The EU has agreed to ban imports of Russian oil because there is no desire to increase Vladimir Putin’s military treasury. The price of gasoline had been rising in the past after the coronavirus pandemic eased. The summer holiday season and the weakening of the euro against the dollar will also raise prices.
Veroale has received a complete blow from economists. A ten-cent tax cut would cost the state a billion – and the effect might not even be noticed in pump prices. Since gasoline is purchased anyway, the distributor can pass on the discount to their margin. It is better if motoring is reduced, the demand for petrol falls and the price falls through it. According to a recent study, almost half of motorists say they have reduced driving because of expensive petrol.
That would also be an advantage for the climate. The government has already made a concession on the green transition by temporarily reducing the distribution obligation from 19.5 per cent to 12 per cent. According to the gradually tightening distribution obligation, a certain proportion of the fuel sold must be non-fossil. Compromising the obligation may have been politically necessary, but the direction is still wrong.
The tax cut would not only be costly but also inefficient, as the reductions would not be able to be targeted at those most in need, but would also flow to the rich – and eventually to the oil companies. There is no point in making such a poor solution. Decision-makers need to be able to fight the pressure, even if it is difficult.
The editorials are HS’s statements on a topical issue. The writings are prepared by HS’s editorial staff and reflect the magazine principle.
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