MONET 2030: Petroleum tax relief

SDG 12: Ensure sustainable consumption and production patterns

Goal description

« […] Sustainable consumption and production aims at “doing more and better with less,” increasing net welfare gains from economic activities by reducing resource use, degradation and pollution along the whole lifecycle, while increasing quality of life. […]»

Swiss target 12.c: Negative environmental impacts of existing financial incentives for the use of fossil fuels are identified, and action taken to phase out their use.

Significance of the indicator
The indicator shows the share of net revenue from petroleum tax that is reimbursed to certain companies due to the nature of their activities. The consumption taxes levied on petroleum push up the price of the product and therefore have a negative impact on their consumption, which could be seen as positive from an environmental perspective. However, tax relief cannot be interpreted unequivocally from a sustainable development perspective. For example, tax relief awarded for ski slope grooming equipment can be considered a support measure for tourism activities in peripheral regions, although even using such equipment has a proven environmental impact.

Help for interpretation
Net income from petroleum tax is in decline. Notable reasons for this are: the use of more efficient vehicles, the lack of compensation in connection with the promotion of renewable fuels and the decline in fuel tourism. In contrast, reimbursements for tax have either remained stable or have tended to increase (e.g. due to new tax relief for ski-track grooming vehicles). Accordingly, the ratio of reimbursements to the petroleum tax net value shows an upward trend.

International comparability
This indicator is not directly comparable due to the variation in national practices. However, the OECD has drawn up an inventory of support measures for fossil fuels used by its member countries.

Synthesis

Comments: No assessment of the indicator’s trend as the desired trend cannot be determined.

These data are produced and published by the Federal Office for Customs and Border Security. The categories of products subject to petroleum tax and the categories of consumers who benefit from tax relief are listed in the Mineral Oil Tax Act (MinOTA, RS 641.61).

Beneficiaries of this tax relief include farmers, forestry companies, commercial fishermen, natural stone quarrying companies, ski slope maintenance operators and licensed transport companies. Fuel sold in Switzerland for international air transport is not taxed at all.

Swiss target 12.c: Negative environmental impacts of existing financial incentives for the use of fossil fuels are identified, and action taken to phase out their use.

Internationale target 12.c: Rationalize inefficient fossil-fuel subsidies that encourage wasteful consumption by removing market distortions, in accordance with national circumstances, including by restructuring taxation and phasing out those harmful subsidies, where they exist, to reflect their environmental impacts, taking fully into account the specific needs and conditions of developing countries and minimizing the possible adverse impacts on their development in a manner that protects the poor and the affected communities.