The measure was announced on Thursday by German Chancellor Olaf Scholz to offset runaway inflation.
The German government has decided to temporarily lower the VAT on gas, from 19% to 7%, to help consumers in the face of soaring prices triggered by the war in Ukraine, Chancellor Olaf Scholz announced on Thursday.
Read alsoGas: Germany risks missing the target of filling its tanks
The reduced rate will remain in effect at least until the end of March 2024 and “we expect companies to pass this decline 100% on to customers“added Olaf Scholz to the press.
Reduction of the tax on all consumption
Rising prices “is a heavy burden for many people“Admitted the head of government in a brief statement to the press. While prices are already rising rapidly, bills will still increase significantly from October 1, when gas distributors will be able – thanks to a new law – to pass on the increase in purchase prices to customers. Companies will be able to request an additional exceptional levy of 2.4 centimes per kilowatt hour (KWh) of gas from individuals and companies. VAT included, this represents some 600 euros more per year for an average household with two children and a consumption of 20,000 KWh.
The coalition government was seeking to exempt this levy entirely from VAT, a measure refused by the European Commission. Berlin therefore decided to lower the tax on all consumption, which “relieves consumers moreWhat the exceptional levy costs, assured Olaf Scholz. The Chancellor also reiterated the promise of a new aid package “to ease the pressure on individuals and businesses“. The details of the measures are currently the subject of negotiations within the coalition. Germany has already put in place aid totaling 30 billion euros, including discounts at the pump or the popular 9-euro ticket, which allows travel on public transport and regional trains. for a month. However, the measure stops at the end of August.