Lisbon, Oct. 23, 2025 (Lusa) - The elimination of the current fuel tax (ISP) rebate and the updating of the carbon tax would bring additional revenue to the state coffers of €1.132 billion, estimates the Portuguese Public Finance Council (CFP).

In its report analysing the proposed State Budget for 2026 (OE2026), the CFP estimates the impact of eliminating the current discount on the Tax on Petroleum and Energy Products (ISP), concluding that the direct annual impact of the increase in revenue expected from the full update of ISP rates on 1 January 2026 could amount to €873 million.

Updating the carbon tax in 2026, according to the CFP's projections, would increase tax revenue by €47 million. "In addition to these two components, which form an integral part of the price of oil products, there would also be additional VAT revenue of €212 million, because this tax is applied to all the components that make up their price," the organisation notes.

Thus, the potential increase in tax revenue resulting from the extinction of the ISP rebate and the updating of the carbon tax for 2026 "would result in an additional revenue gain of €1.132 billion (0.4% of GDP), if the reversal of these measures went ahead at the beginning of next year and in full," concludes the CFP.

This exercise arose from the European Commission's recommendations to reduce these discounts, which were exceptional measures aimed at softening the impact of rising fuel prices.

However, the government has not included in the 2026 budget proposal any forecast for the elimination of these discounts and has already signalled that the process should be gradual.

The Minister of Finance, Joaquim Miranda Sarmento, guaranteed that the government is working on a solution that doesn't increase fuel prices, pointing out that they will look for "moments of price reduction, to be able to reverse these discounts".

MES/ADB // ADB.

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