BERLIN (Pakistan Point News / Sputnik - 18th August, 2022) German Chancellor Olaf Scholz has announced on Thursday slashing the value-added tax (VAT) on gas to 7% from 19% as a relief measure for households and businesses.
This decision comes amid the plans to impose a so-called gas levy on consumers from October 1 to help gas suppliers cope with soaring import prices. According to German media, the surcharge will cost up to 400-600 Euros ($407-611) a year for a family of four.
"The government is unanimous in the opinion that gas consumers should not incur additional costs due to the mandatory VAT on gas utility bills ... That is why the government today decided to reduce the VAT rate on gas to 7% for a specified term. It will be in effect for as long as the gas levy is collected, that is until March 31, 2024," Scholz said.
This effort aims to relieve the pressure on German gas consumers much more than the financial burden of extra levies, Scholz noted.
The cabinet will also introduce a new package of relief measures for individuals and companies amid the unfolding energy crisis.
"The actual make-up of the package is discussed confidentially in the government. Fairness remains the key principle, so that the country is united in this crisis," Scholz said.
The government initially intended to introduce a VAT waiver on the gas surcharge. However, the plan raised legal objections from the European Union, prompting Germany to seek other means to support consumers.
