Filenews 22 December 2021 - by Adamos Adamou
The reduction of VAT from 19% to 9% for residential users from 1 November and for three months was formalised yesterday, but consumers will see the reduction in EAC bills they will get in the new year. The relevant decree of the Council of Ministers, for a three-month reduction of VAT on electricity for residential users and for a six-month reduction to 5% for vulnerable consumers, was published yesterday in the official gazette of the Republic. This implements the government's decision that was announced last week, by decision of the Council of Ministers, by which in essence the government rejected what the Parliament approved by a majority on the issue.
We recall that the opposition approved a proposal for a law for a universal reduction of the VAT rate from 19% to 9% for all users, both domestic and business, with no expiry date for the reduction, arguing that the indefinite reduction is also allowed by the relevant framework approved by the EU.
In response to what was approved, the government proposed a targeted reduction in VAT with an expiry date, which has been implemented by yesterday's decree. Regarding the legislation passed by the Parliament, the government spokesman Marios Pelekanos confirmed yesterday to "F" that it was referred back, with the law of the opposition being returned in essence back to the Parliament, which has under the Constitution a period of 15 days to decide whether to accept the referral.
Regardless of the developments regarding the fate of the Parliament's proposal, consumers, at least household users, are expected to be relieved anyway based on what was published yesterday in the official gazette of the Republic. According to the decree, from November 1, 2021 until January 31, 2022, the VAT rate for electricity supply falling under household tariff 01 and 02 and 56 (thermal energy storage for domestic use-storage heaters) is reduced from 19% to 9%. Furthermore, the VAT rate for the supply of electricity that falls under the domestic tariff for vulnerable consumers 08 and 56 (storage of thermal energy for domestic use) for vulnerable population groups defined in the relevant decree is reduced from 1 November to 30 April from 19% to 5%.
However, as EAC spokeswoman Christina Papadopoulou told "F", the reduction in electricity bills as a result of the VAT reduction that was decided will be shown in the bills issued from January 1, 2022 and will concern consumption from November 1st, as it will be recorded by the Authority's crews.
She recalled that EAC has already implemented from November 1st a reduction in the price of electricity, of about 10%, for all users, domestic and commercial, which will last for four months, until the end of February.
They will benefit from a VAT reduction to 5% for six months
With the six-month reduction of VAT to 5% on the supply of electricity under yesterday's decree, the following vulnerable categories will benefit, provided that they are registered in these categories:
Families with many or five members who receive Child Benefit from the Welfare Benefits Administration Service of the Ministry of Labour, Welfare and Social Insurance for three dependent children or more and with an annual mixed family income of up to €51,258. The income criterion of €51,258 for the annual gross family income is gradually increased by €5,126 for each additional child over four.
Recipients of Public Assistance from the Social Welfare Services of the Ministry of Labour, Welfare and Social Insurance.
Beneficiaries of a Guaranteed Minimum Income provided by the Welfare Benefits Administration Service of the Ministry of Labour, Welfare and Social Insurance.
Recipients of severe motor disability benefit from the Department of Social Integration of People with Disabilities of the Ministry of Labour, Welfare and Social Insurance.
Recipients of Care Allowance for Quadriplegic Persons from the Department of Social Integration of People with Disabilities of the Ministry of Labour, Welfare and Social Insurance.
Recipients of Care Allowance for Paraplegic People from the Department of Social Integration of People with Disabilities of the Ministry of Labour, Welfare and Social Insurance.
Dialysis patients who receive a Mobility Allowance from the Department of Social Integration of People with Disabilities of the Ministry of Labour, Welfare and Social Insurance.
People suffering from multiple sclerosis (multiple sclerosis) who are registered members of the Pancyprian Multiple Sclerosis Association.
Spain: Reduced taxes on electricity for a year
On the same day that the decree for the reduction of VAT on electricity for three months (for residential) and for six months (for vulnerable consumers) was published in Cyprus, Spain announced that the reductions in VAT and other taxes related to energy will be extended until May 2022, thus completing a year of reduced taxation, to compensate for the large increases in electricity prices.
Government spokeswoman Isabel Rodriguez said reduced taxes will not return to their original levels at the end of December, as was the original decision, but will be extended until May as electricity prices remain soaring. The burden on public finances from the extension of the power of low taxation is estimated at around two billion euros. euro.
Based on this decision, VAT on energy bills will remain at 10%, from 21% which is normal, while the special tax on electricity will remain at 0.5% until 30 April. Also, the 7% tax on electricity generation, which is eventually passed on to consumers, will remain suspended until the end of March.
