Spain Сuts VAT On Natural Gas From 21% To 5%

Sumaira FH Published September 20, 2022 | 10:22 PM

Spain's Council of Ministers approved on Tuesday a reduction in the value-added tax (VAT) on supplies of natural gas and solid fuels from 21% to 5% to help citizens facing energy crisis and high inflation, the Ministry of Ecological Transition and Demographic Challenge (MITECO) said

MADRID (UrduPoint News / Sputnik - 20th September, 2022) Spain's Council of Ministers approved on Tuesday a reduction in the value-added tax (VAT) on supplies of natural gas and solid fuels from 21% to 5% to help citizens facing energy crisis and high inflation, the Ministry of Ecological Transition and Demographic Challenge (MITECO) said.

"The Council of Ministers... has approved a Royal Decree-Law on several measures in the energy field, such as the reduction of VAT from 21% to 5% on supplies of natural gas, pellets, briquettes and firewood, with savings for consumers of about 210 million Euros ($210 million)," a statement read.

Of this amount, the reduced rate for natural gas alone will ensure savings worth 190 million euros, the MITECO added.

The measure will remain in effect until the end of 2022, according to the statement.

The Spanish government decided to approve new rules amid the ongoing energy crisis and high inflation in the country.

According to the Spanish Statistical Office, consumer inflation in the country accelerated to 10.7% in July, which is significantly higher than in many EU member states. For comparison, the figure is 6.8% in France, 8.4% in Italy and 8.5% in Germany.

On February 24, Russia began a military operation in Ukraine responding to calls for help from the breakaway republics of Donetsk and Luhansk. The West and its allies imposed comprehensive sanctions against Russia, with the European Union pledging to end its dependence on Russian energy supplies. The bloc has already approved seven packages of sanctions against Moscow, including gradual phase-out of Russian oil. The Ukraine crisis and sanctions have accelerated European-wide inflation and resulted in disruptions of supply chains and a spike in energy prices worldwide.