The Minister of Finance, the CD&V Vincent Van Peteghem, seems to have changed his mind about the use of a VAT cut on energy (gas and electricity) to support households in the face of rising bills. The same minister had ruled out a lowered VAT on electricity last September, while the PTB indicated on Wednesday that it would table an amendment to this effect on Thursday in the House.
At the microphone of the VRT, Vincent Van Peteghem (CD&V) said Wednesday evening that he will propose to the federal government various avenues to make household energy bills less painful. And one of these tracks would be a temporary reduction from 21 to 6% of the VAT, the measure “fastest and with a considerable impact on citizens’ bills“, according to him.
Current measures
Last October, the federal government had already agreed on a series of measures to deal with rising energy prices. For example, it was decided to extend the allocation of the social gas / electricity tariff for a wider public (exceptionally including all beneficiaries of increased intervention) beyond the end of 2021, until the end of March 2022, which concerns approximately one million households.
A premium of 80 euros is added for beneficiaries of the social tariff. Since this month of January, federal levies on energy bills have also been transformed into excise duties, which have been frozen. The advantage of these excises is to allow a more flexible federal intervention on the invoices, which will also make it possible to act in the longer term.
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In October, the opposition (at the federal level) blasted measures that, according to it, do not help the middle class enough. Within its ranks, the PTB regularly repeats being in favor of a 6% VAT on energy, which it will put back on the table of parliament on Thursday. The PS, in the majority, also has on its program a lowered VAT on gas and electricity, as had been decided (for electricity) under the Di Rupo government (2011-2014).
It’s expensive, around 770 million euros per year
Whenever the question of a reduction in VAT on electricity resurfaces, the question of the cost of such a measure is brought to the fore. “It’s expensive, around 770 million euros per year“, Minister Van Peteghem said in mid-September.
One of its side effects is also debated: the impact of a lasting drop in the bill on wage indexation, which would be delayed, given that gas and electricity are included in the health index.