Sánchez announces a reduction in VAT on electricity from 10% to 5%

Pedro Sánchez has taken advantage of the first control session of the Government after the elections in Andalusia to make the first announcement about the anti-crisis plan that the Government will approve on Saturday and whose details are still being negotiated within the coalition. The president has assured in Congress that the decree will contain a drop in VAT on electricity to 5% from the current 10%. This has been solemnized by Sánchez in response to the ERC spokesman, Gabriel Rufián, who had demanded that he comply with what was promised in the programmatic agreement, especially what has to do with the tax system and has asked him to put a tax on large fortunes and the electric ones.

The Government ruled out lowering VAT further in the previous anti-crisis decree, as Alberto Núñez Feijóo had proposed. At that time, the European Commission sent a letter to member states asking them to rule out tax cuts. “VAT rate cuts, in particular, have a poor track record of translating into low prices for consumers, as tax cuts may be offset by higher rates from energy providers. In these cases, non-energy companies could be even worse off: they do not benefit from the lower rates (since they deduct VAT anyway) and suffer from the increase in prices, ”said the letter signed by the European Commissioner for Economics, Paolo Gentiloni.

"Instead of criticizing, support this decree for the benefit of families," Sánchez told Rufián, who had asked him how he intends to end the legislature and had warned him that inflation can "overwhelm" the Executive and also the regional governments and parliamentary allies. The president has assured that he will exhaust it as he has been doing so far: “Protecting the families that are suffering the consequences of the pandemic and the war, advancing in the conquest of rights and freedoms, as we have done by recognizing a new right as a dignified death. And also opening a dialogue with Catalonia, a territory that in 2017 and 2019 suffered a crisis of coexistence”. The Government resumed contact with the Generalitat just after the Andalusian elections on Sunday. The Minister of the Presidency, Félix Bolaños, meets this afternoon with the Minister Laura Vilagrá and in Moncloa they assure that Sánchez will meet with Pere Aragonès, although they do not set any date.

"This government speaks clearly to citizens, it knows the origin of inflation and it is a war at the gates of Europe," said the president, who has assured that he will continue to work "at a European level" and in Spain, approving measures to cushion the effects of inflation. Rufián had made a portrait of the situation in Spain by reminding him that gasoline has risen 66% in the last year and electricity 46% while electric companies share billions of euros. "While people are burning in parks and on the streets for fear of putting on the air conditioning," said the ERC spokesman.

“Do you know what a melon can cost in this country? 13 euros. A watermelon? 12 euros. Half a kilo of cherries? 6 euros. In a country where the average salary is 16,300 euros, how do you think people can manage to buy fruit in the summer? This can devastate you and us, any government, and above all any leftist initiative. Enough of patches. Enough of checks ”, she has said in reference to the proposal of the second vice president, Yolanda Díaz, to distribute 300 euros for the purchase of vulnerable people. "Do what they promised they would do because if you don't, the cost of living will devastate you," Rufián warned.

"Victories and defeats are not final"

Sánchez's announcement about the drop in VAT on electricity was looking for a headline in the president's first public reaction after the debacle of the Socialists in Andalusia, which the PP spokeswoman, Cuca Gamarra, reminded him of as soon as he began his question. “He has not yet reacted to his debacle in Andalusia. While adding defeats, the Spaniards multiply their problems”, a satisfied Gamarra told him after the absolute majority of Juanma Moreno Bonilla. “The defeats have something positive: they are never final; On the other hand, victories have some negative: they are never definitive. This should be remembered in good and bad times”, Sánchez expressed, paraphrasing the writer José Saramago.

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