The Government studies a reduced VAT on the receipt of electricity for some consumers

The Government studies a reduced VAT on the receipt of electricity for some consumers


The Government is studying the application of a reduced VAT upon receipt of the electricity, compared to the general rate of 21% existing Currently, for some types of consumers, as announced by the Minister for Ecological Transition on Tuesday. In appearance in the Commission of Ecological Transition in the Senate, Ribera said that his cabinet is studying, together with the Ministry of Finance, the possibility of adopting this reduced VAT for the light directed to the receipt of "according to types of consumers".

The application of a reduced VAT to a service such as electricity has been a request from some institutions, such as the Ombudsman among others, considering that it is a good of first necessity that does not benefit from this measure if it accompanies other types of basic products.

In Spain, VAT on electricity consumption was 18%, until in July 2012 the first government of Mariano Rajoy raised it to 21%. With that charge of 21% on the receipt, the VAT of the light in Spain supposese a rate higher than that of several of the surrounding countries and exceeds the European Union average, which is around 18%.

In his appearance, Ribera stressed that the price of electricity is a "sensitive and important" issue, especially when it refers to the most vulnerable population. Thus, he defended that "only an efficient system based on renewable energy allows prices of stable electricity", as was demonstrated last week when the record wind production led to Spain to mark the price of the cheapest pool in Europe, reason why it assured that it is "ineludible" to transit towards "a market thus".

Ribera indicated that temporary measures adopted in October, as the suspension of the 7% tax on electricity generation for six months or the exemption of the 'green cent' for the generation of gas, have meant a reduction of between 8% and 16% in the average wholesale market price of electricity, known as 'pool', and have represented a reduction in the invoice of a typical domestic consumer covered by the regulated tariff (PVCP) of "around 4%".

The minister also said she was aware that these short-term measures are not "a definitive solution" for a consumer who wants "more predictable and stable" bills, but said that they represent "a relief" from the previous situation.

On the other hand, he pointed out that the Government is studying the start of the recovery of hydroelectric concessions, as they are reaching their due date, to benefit local communities, "underlining that important public function that water jumps must perform," he said.


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