The Government assumes that it will have to extend the VAT reduction on electricity and the discount on fuel

The Government recognizes that it will have to extend “many” of the measures approved months ago to respond to the economic and social consequences of the war in Ukraine -such as the reduction of the electricity bill or the discount on fuel- before its validity ends on December 31, but ensures that it has “sufficient slack and margin” to assume it.

Although the Executive has not contemplated in the General State Budgets (PGE) of 2023 none of the measures to respond to the consequences of the war in Ukraine, sources of the Treasury confirm that in November or December the Government will approve a new package to extend many measures. The only exception that is included in the public accounts for next year is the free Commuter and Medium Distance tickets for frequent travellers, which will account for some 660 million euros throughout the year.

Among the measures extended by the Government at the end of June, the lowering of the VAT on electricity bill from 10% to 5%, which applies to consumers, companies or individuals, with a contracted power of up to 10 kilowatts. In addition, an extension of the measure consisting of the application of the tax rate of 0.5% of the Special Tax on Electricity, and the extension of the temporary suspension of the Tax on the value of the production of electrical energy.

For him Electricity Tax, The Government proposes in the PGE of 2023 that the collection be multiplied by more than six next year, up to 1,364 million euros, compared to the 204 million planned for this year. However, that figure will vary in case the Executive decides to extend the tax reduction.

In the field of fuels, the decree includes the reduction of 20 cents in the liter of fuel. The price of the butane cylinder is also frozen, which, after the last review, is 19.55 euros. With the aim of reinforcing the protection of the most vulnerable groups, the Government stipulated the prohibition of suspending the supply of energy, the cap on rent increases at 2% and that the increase in energy costs cannot be a cause for dismissal in companies that depend on the Management.

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