IVA Cut on Gas

Spanish PM, Pedro Sánchez, has announced that he will bring IVA on gas from 21% to 5% from here to at least the end of the year.

SPN Pedro Sanchez PM speaks on Cadena Ser 400x250Sr. Sánchez made this announcement on Cadena Ser (radio broadcasting channel) just days before a scheduled face-to-face, parliamentary debate between himself and the chief, opposition leader, Alberto Núñez Feijoo (PP) in the Senate. A reduction on IVA levied on natural gas prices was one of the points proposed by Sr. Feijoo.

The global rise in gas prices has pushed the price of electricity up to over 300 euros per megawatt hour during August and the coming months look to be even bleaker.

This IVA reduction joins the previous one levied on electricity bills when it was cut from 10% to 5% this spring. Apparently, the European Commission does not permit a lower IVA rate than 5% on such bills.

The Minister of Hacienda, María Jesús Montero, has already calculated the impact that this reduction will have on consumer pockets and for the State: the State will generate 190 million euros less per quarter for the country’s coffers.

“They are selective measures for opportune moments,” she said, adding, “it’s about families being able to enjoy a greater wellbeing this winter when there is a massive demand for heating.”

The truth is that despite the successive steps taken by the Central Government during this last year to contain the prices of electricity and gas, most have failed in their intent. For instance, apart from IVA cuts, the Government also reduced the Special Tax on Electricity to just 0.5%.

Furthermore the ‘Iberian Mechanism’ (a system that the EU permits Portugal and Spain to apply) that came into force on the 15th of June, has not produced the desired effect on prices. However, the PM assures that had the I.M. not been in place, prices would have been 15% higher with respect to the rest of Europe.

Whatever the case, August this year has become the most expensive month in History with regard to electricity bills.

(News: Spain)

  1 comment for “IVA Cut on Gas

  1. Patrick Barry Storey
    September 2, 2022 at 10:30 am

    Well if only until the end of this year. At least the government here are trying.
    Shame on the electric and gas companies.

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