Tax rebates are extended until April 30


The Government has approved this Tuesday in the Council of Ministers a Royal Decree-law with the extension of part of the fiscal measures to lower the electricity bill until next April 30, including the reduced VAT rate of 10%, the Special Tax on Electricity at 0.5% and discounts on the social bond; In addition, the temporary suspension of the Tax of 7% on electricity generation is maintained, in this case until March 31. On the other hand, the Executive has given the green light to new measures to promote self-consumption, at a time when the prices of electricity in the wholesale market are growing without restraint.

This was pointed out in the round after the Council of Ministers by the Vice President for the Ecological Transition, Teresa Ribera, given the imminent completion on December 31 of the package of fiscal measures launched to contain the prices of electricity in the wholesale market – known as pool-, which have an impact on the bill of almost 11 million consumers and which are already above 300 euros per megawatt hour (MWh), almost eight times the cost of the previous year.

Without going any further, the pool will break all records this Wednesday, standing at 360.02 euros per megawatt hour (MWh). “The forecasts are not particularly promising and we believe that it is essential to maintain the reductions and the suspension of some tax bills of our electricity bill,” explained Ribera.

However, the extension of tax rebates until next April 30 will not include the 96% cut of the invoice charges of households, which have a weight in the receipt of around 30%. This is a measure that was to be paid for by a cut to electricity companies of about 2,600 million euros due to the income obtained from the rise in gas and that was finally reduced to 600 million. In this way, a hole in the public accounts of some 2,000 million euros has been generated, a deficit that the Government wants to put an end to with the return of these positions in January.

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In this sense, Ribera has indicated that the intention of the Executive is “to maintain a level of reduction equivalent to the current one, but weighted throughout the year, thus being able to ensure the balance of the system.” “The proposal that is being maintained is a 30% reduction throughout the annuity, a payment of 7 euros per invoice “, said the minister, although it is a measure that” is still in process and until the processing has been completed, everything is provisional. “

Part of the measures are extended to lower the invoice

Thus, runs for four months (January to April) the reduction from 21 to 10% in the VAT levied on electricity and from 5.1 to 0.5% of the Special Tax on Electricity, while the beneficiaries of the electricity social bonus will maintain their discounts of between 60% and 70% -before 25% and 40%, respectively- of its energy consumption until the same period, on April 30. On the other hand, the suspension of the 7% tax on electricity generation continues until March 31.

“These measures show the determination of a sensitive government that supports families, and has an important budgetary implication, with more than 2,000 million euros of support to families”Added the Minister of Territorial Policy and Government spokesperson, Isabel Rodríguez.

In addition, the Government has also approved an additional measure to all these reductions aimed exclusively at industrial gas consumers, introducing flexibility measures so that they can change their rate or suspend their contracts during the first quarter of next year. This measure, which was already used during the confinement, will allow to “alleviate” the invoice of the companies, according to the third vice president.

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Likewise, the Executive has given the green light to a series of measures to favor the deployment of self-consumption, whose implementation has multiplied by 2.5 times since the arrival of his Government in 2018, according to Ribera. Among them, the procedures to install a photovoltaic installation will be simplified, where those with less than 100 kilowatts will not have the obligation to present financial guarantees, and shared self-consumption, which until now could only be done in low voltage and is also included in high voltage.


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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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