Spain will significantly reduce the VAT on gas

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Spain will reduce the VAT on natural gas from October, from 21% to 5%, to alleviate the burden on households and companies, affected by the increase in energy costs, Prime Minister Pedro Sanchez announced on Thursday on the local Cadena SER radio station, Reuters reports.

“So that the heating bills of the citizens are lower”, explained the Spanish official. He added: “The government seeks to fairly share the costs and expenses of the war in Ukraine.”

In the last year, Spain reduced VAT on electricity twice, according to Agerpres.

Madrid authorities have pledged to reduce the use of gas, although so far gas consumption has increased compared to last year.

This summer’s heatwaves have increased demand for electricity, following intensive use of air conditioners, while hydropower production has fallen due to water shortages.

And Germany announced last month that it would temporarily cut VAT on natural gas from 19% to 7% to try to ease the burden on households and businesses hit by rising energy costs and the imposition of a new gas tax from October. .

Chancellor Olaf Scholz announced that the Executive expects suppliers to fully transfer the VAT reduction to consumers, the measure to be applied between October 2022 and March 2024.

“With this measure, we reduce the overall burden on customers more than the burden created by the new gas tax. The VAT reduction will apply as long as the gas tax is collected,” he told reporters.