Grenada Government Reduces Fuel Tax

by Mike Godfrey, Tax-News.com, Washington

27 April 2011

The Grenada government has reduced gasoline tax by the maximum possible amount, in an effort to curb the steady rise in energy prices.

Effective April 18, the amount of tax collected per gallon of gasoline in Grenada has been significantly reduced. Government predictions show that, had no alterations to the rate been made, on April 18 the price of gasoline would have risen from XCD14.68 to XCD15.62 per gallon. However, by cutting the tax it levies by XCD0.5 per gallon, the new price sits at XCD15.12.

According to government estimates, this will cost approximately XCD500,000 in lost petrol tax revenue over the period April 18 - May 17. The government has also been keen to stress that it does not benefit from high oil prices: indeed, it has been reiterated that revenue is often lost due to the periodic need to cut tax rates. Moreover, Grenada imports the great majority of its fuel, and, as such, the government has made it clear that there is a limit to the efforts it can make to cushion high prices.

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