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"The government is discounting what it gains extra in VAT from the ISP": former minister explains the logic behind fuel discountsPhoto by MrGajowy3 on Pexels
Politics

"The government is discounting what it gains extra in VAT from the ISP": former minister explains the logic behind fuel discounts

CNN Portugal7 September 2026 at 11:14

The Portuguese government is using the additional VAT revenue collected due to the increase in fuel prices to finance ISP (Imposto Sobre Produtos Petrolíferos - Excise Duty on Petroleum Products) discounts, according to the logic explained by former members of the Executive.

Manuel Caldeira Cabral, former Minister of the Economy, considered that the discounts applied by the government on fuels "are already reasonable," when analyzing the escalation of fuel prices.

The mechanism consists of discounting on fuel taxes the extra value that the State collects in VAT due to higher prices, allowing to keep prices more accessible for consumers.

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