The Ministry of Finance and the Ministry of Economic Affairs have hammered out a plan to cut commodity taxes on gasoline, diesel and fuel oil by 30 percent for a period of three months from October, pending Cabinet approval.
The commodity tax on jet fuel oil would remain unchanged, as it is taxed less heavily. This will be the first time in 15 years that these commodity taxes are cut. The government slashed commodity taxes on oil products by 50 percent for a year in 1990 during the Gulf War.
According to the finance ministry's statistics, the planned tax cut will reduce the government's income by between NT$5 billion (US$151 million) and NT$6 billion.
The state coffers last year received around NT$89.7 billion in commodity tax revenues on oil products.
The cuts in commodity tax rates on oil products came after Premier Frank Hsieh (謝長廷) said on Tuesday that the government will maintain state-run Chinese Petroleum Corp's (CPC, 中油) wholesale fuel prices for three months to help stabilize domestic fuel prices and reduce inflation concerns.
At the time, Hsieh said the government would lower commodity taxes on oil products to compensate losses incurred by CPC for not raising prices as its crude oil costs increase.
Formosa Petrochemical Corp (