Tuesday. 05.07.2022
ENERGY CRISIS

Spanish government looks to halve VAT on electricity as prices climb

At the suggestion of Labour Minister Yolanda Díaz, the government is also now considering a special payment of €300 ($315) per person for all families who are in need

22 June 2022, Spain, Madrid: Spanish Prime Minister Pedro Sanchez, speaks during a plenary session at the Spanish Congress of Deputies. Photo: Eduardo Parra/EUROPA PRESS/dpa.
Spanish Prime Minister Pedro Sanchez, speaks during a plenary session at the Spanish Congress of Deputies. Photo: Eduardo Parra/dpa.

The Spanish government is looking to offer new relief measures to ease the impact of surging inflation on citizens, Prime Minister Pedro Sánchez told parliament on Wednesday.

A further reduction in the value-added tax (VAT) on electricity bills from 10% to 5% is planned, Sánchez said.

This, along with other initiatives, are to be decided at a special Cabinet meeting set for Saturday. The left-wing minority government's plan must also be approved by lawmakers.

Sánchez appealed to the opposition to support the latest package "instead of complaining, instead of criticizing." He said his plan was "for the good of families, businesses and industry."

A year ago, Madrid reduced the VAT rate on electricity from 21% to 10% in response to rising energy prices.

Special payment

At the suggestion of Labour Minister Yolanda Díaz, the government is also now considering a special payment of €300 ($315) per person for all families who are in need.

In addition, current relief measures to cushion the effects of the war in Ukraine and the rise in energy prices are to be extended by three months until September 30.

At the end of April, lawmakers in the Congress of Deputies approved that €16-billion plan by a narrow majority of 176 to 172. It included direct subsidies and tax breaks amounting to €6 billion as well as a further €10 billion in state-backed loans.

Spanish government looks to halve VAT on electricity as prices climb
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