Harmonized consumer price index of constant tax rate and changes by commodity groups (ECOICOP)
Harmonized index of consumer prices of constant tax rate
Harmonized index of consumer prices at constant tax rate index (HICP-CT) is satellite index of harmonized index of consumer prices from which the influence of indirect taxes on consumer prices is excluded. When calculating the HICP-CT, the tax rates remain constant over time. Therefore, if tax rates on products are being changed, the HICP and HICP-CT show different values. Difference of these values characterizes theoretically possible influence of tax changes on the price index. For example, if HICP in January 2011 in comparison to December 2010 increased by 1.3 %, but HICP-CT remained unchanged, the difference (1.3 percentage points) characterizes the tax rise impact on the total HICP, assuming that tax changes in consumer prices in January are reflected in full immediately.
In practice, the real tax impact can differ from the theoretical, and it may not be reflected in one month, but spread over several months.
At the moment, HICP-CT includes excise duty and value added tax, as well as passenger car registration tax.
Harmonised Index of Consumer Prices (HICP)
The HICP reflects changes in the prices of consumer goods and services in a specified period of time. The HICP measures changes of the average level of prices of goods and services that households consume (the fixed consumer basket). The HICP is used for comparing changes in consumer price levels in the EU Member States and for measuring the stability of prices in the euro area.
The HICP reference period is the year 2015, expressed by 100 index points (2015 = 100).
The HICP is pure price index. It does not reflect the changes in consumption patterns, brands, and does not reflect the effect of outlet and service provider substitution.