VAT on gas will go from 21% to 5% starting in October. The President of the Government, Pedro Sánchez, has advanced the reduction this Thursday, one more measure in the plan that the Executive is developing in the face of the energy crisis that threatens Europe in the face of winter.
“I announce that the Government is going to propose a drop from 21 to 5 percent of VAT on gas,” Sánchez indicated in Cadena Ser. The measure will be proposed from October to December 31 , although the Executive is open to extend the measure throughout the next year if the situation remains complex.
Sánchez has described as “reasonable” that the Executive try to lower the heating bill to continue “protecting the middle and working class” at a time of so much uncertainty caused by the war in Ukraine. Before this measure, Sánchez recalled, the Government had already reduced taxes linked to electricity by 80% ; VAT is at 5% from June 25.
The reduction of VAT on gas will cost the State around 190 million euros, which it will stop entering in the closing quarter of the year, according to the Minister of Finance and Public Function, María Jesús Montero, in statements to the media. in Mérida, where he met with the president of the Junta de Extremadura, Guillermo Fernández Vara.
It is, he said, a “selective” tax measure for families and companies to save around these almost 200 million euros. According to the calculations advanced by the minister, the reduction in VAT on gas will have a lower impact than on electricity, since by next December the Government will have saved more than 10,000 million euros for families and companies.
The measure will not be without controversy.
The Government takes the step after having requested the PP on several occasions to the Government for this VAT reduction on gas. In fact, it was one of the proposals that the parliamentary group announced that it would formulate at Sánchez’s appearance in the Senate next Tuesday in which he will explain the energy saving measures.
The measure, however, will not be without controversy. Shortly after the announcement, the leader of Más País, Íñigo Errejón, questioned the generalized reduction on Twitter and announced that he would propose to Sánchez “a progressive VAT for gas consumption” to encourage more energy saving and because it is fairer, for not helping equally “those who have little and those who have a lot”.
Regarding Europe’s gas supply problems for winter (despite the fact that reserves are above what was calculated for these dates, they are only enough to cover two months of consumption ), the president has maintained the message in which other members of the Government, such as Vice President Teresa Ribera, have insisted in recent days: the Government is not contemplating gas restrictions for this winter because the situation in Spain is safer than that of other countries despite widespread uncertainty.
Last week, the Executive obtained the approval of Congress for the energy saving plan that aims to deal with the rise in energy prices and dependence on Russia. Among the measures included is the controversial limitation of the temperature in heating (maximum 19 degrees) and air conditioning (minimum 27 degrees).
Mark Phil is a former market analyst and consultant. Mark in his 9-year career as an analyst, worked with top market players like Prodge LLS, Westat Inc. and Precision Opinion Inc. He moved towards writing in the year 2013. In the past, he undertook several freelance projects to begin his writing profession. Mark completed his economics degree from Columbia University. Along with performing sub-editorial duties, he is also writing a book on Market analysis.