Despite being declared illegal by the Court of Justice of the European Union (CJEU) in 2022, the controversial Road Service Contribution (CSR) continues to generate millions of euros for the Portuguese government. Now disguised within the ISP (Tax on Petroleum and Energy Products), the state will collect 675.3 million euros this year, according to the Jornal de Notícias.
What is the CSR and Why Was it Declared Illegal?
Created in 2007, the CSR was originally intended to fund the construction and maintenance of the national road network, operated by Infraestruturas de Portugal (IP). However, the CJEU deemed the tax illegal in 2022, stating that it violated the rules of European Directive 2008/118/EC. The decision indicated that the CSR lacked a valid specific purpose, such as reducing fuel consumption or promoting sustainable practices.
Following the CJEU’s decision, the CSR was officially abolished at the end of 2022 (Law No. 24-E/2022). However, instead of eliminating the amount, the government incorporated it into the ISP, thereby increasing its tax revenue.
The Fiscal “Move”: CSR Incorporated into the ISP
Until 2022, the price of fuels included two taxes: 37 cents per liter for the ISP and 8 cents for the CSR, totaling 45 cents per liter. In 2023, after the official abolition of the CSR, the Government increased the ISP to 47 cents per liter, incorporating the 8 cents from the CSR and adding another 2 cents, which raised the tax burden on fuels.
This change was criticized by experts as a way to circumvent the decision of the CJEU and maintain tax revenue. Furthermore, it legally complicated the attempts of companies and consumers to recover the amounts paid in the past, as it made it almost impossible to prove that the CSR still exists within the ISP.
Projections for 2025: CSR Remains Disguised
Despite the alleged cancellation of the CSR, the State Budget for 2025 forecasts the collection of 690.7 million euros from the former contribution, which still funds the maintenance of the national road network. This amount represents an increase of 2.3% compared to 2024.
Lawyer Tiago Caiado Guerreiro criticized the practice, stating that, “in an ideal world,” the charge would be illegal. However, he admitted the difficulty of proving that the CSR was “absorbed” into the ISP, making any legal challenge virtually unfeasible.
Impact on Consumers and Justice
The integration of CSR into ISP has generated outrage among consumers and businesses. Many consider the increase an affront, especially after the decision of the CJEU. However, the Government continues to profit significantly, collecting about 2 million euros per day from the tax.
Meanwhile, ongoing lawsuits face legal obstacles due to the complexity of proving the illegality of the CSR now disguised within the ISP.
A Fiscal Chess Game
The decision to keep the CSR within the ISP raises questions about transparency and governance. For many, the move represents a “fiscal chess game” that benefits the State at the expense of the consumer. With projections for increasing revenues and the authorities’ resistance to changing the tax structure, the controversy promises to continue into 2025.
