Consumers will save nine euros a year on their electricity bills, with a reduction in VAT from 13% to 6%, for households with a contracted capacity of up to 6.90 kilovolt-amperes (kVA), according to the proposal of the State Budget for 2023 ( OE2023 ).
“In the context of the selective reduction in the VAT rate on electricity that started in 2019, there is a transitional reduction in the tax rate applicable to electricity supplies, whereby all consumption currently covered is subject to the reduced VAT rate of 6% average rate of 13%”, is in the proposed state budget for 2023, which was presented in parliament today by the Minister of Finance, Fernando Medida.
According to the document, the measure will enable annual savings of €9 and a total annual saving of €46.5.
The measure covers more than five million consumers and has a budget of 90 million euros next year.
“Electricity supplies for consumption are covered in connection with a contracted capacity not exceeding 6.90 kVA, in the part not exceeding 100 kWh [quilowatt-hora] for a period of 30 days or, in the case of households with five or more persons, for the portion not exceeding 150 kWh per 30-day period,” the document clarifies.
Extraordinary tax on the energy sector continues next year
The extraordinary contribution to the energy sector (CESE), which was established on a temporary basis in 2014, will remain in effect next year, according to the state budget proposal.
“The extraordinary contribution to the energy sector remains in force, the regime of which was approved by Article 228 of Law No. Finance, Fernando Medina.
For example, for the tenth consecutive year, after entry into force in 2014, the rate will remain on a temporary basis.
The extraordinary contribution is paid by REN – Redes Energéticas Nacionais, Galp and EDP.
Transition to regulated gas market with a cost of €60M next year
According to the proposed national budget, the transition to the regulated natural gas market will have a budget cost of €60 million in 2023, as a result of the loss of potential VAT revenue.
According to the proposal, the measure, which was approved in September after announcements of price increases on the free natural gas market, will have a budget cost of 60 million euros next year.
“Assuming that all consumers eligible to return to the regulated market effectively return to the regulated tariff, a maximum total saving with the return to the regulated market of EUR 56.7 million per month was estimated.” read in the document.
So, “assuming the same pricing terms will apply to the free and regulated markets for 12 months,” the government estimates that the measure could deliver “a total savings for consumers of more than €680.4 million by 2023”.
1.5 million consumers of low-pressure natural gas are covered, with a consumption of less than 10,000 m3 per year.
The finance minister presented in parliament this Monday at 1.10 pm the proposed budget for 2023, the second presented by the third executive led by António Costa and supported by an absolute majority of the PS.
The proposed state budget for 2023 will be discussed in general in parliament on April 26 and 27, with the final global vote on the diploma on November 25.
Source: DN
