The Government will review electricity taxation “very soon” with the aim of curbing the high prices that are occurring in recent days in the wholesale market, according to the fourth vice president and minister for the Ecological Transition, Teresa Ribera.

Ribera assures that the Ministry of Finance is already studying all possible alternatives to undertake this eventual intervention in the electricity market and thus lower the electricity bill of consumers. If this trend continues, the receipt points in June to the second most expensive in history with 88.11 (taxes included), which means returning to 2012 levels.

In this context, the head of the Ecological Transition says that there are three options under study for a reduction in VAT: reduction of the general rate [del 21% al tipo reducido del 10%], discrimination by consumption segments or temporarily exclude it entirely. “Any modification of the VAT has to be communicated to Brussels. I ask for patience, we will soon have a proposal from the competent Ministry ”, he defends.

According to the European Commission, Spain bears one of the highest VAT on electricity in the EU. Portugal cut it from 23% to 6%, while in France and Italy it stands at 5.5% and 10%, respectively.

Ribera emphasizes that it is important to know what the structural causes of the rise in electricity are, how a fairer distribution of costs can be made and how it can be guaranteed that “consumers are not the ones who pay their bills with their bills. a very notable increase in the profits of the companies ”.

In the case of a new temporary elimination of the tax on electricity generation (7%) paid by electricity producing companies [coste que acaba en el mercado], as it already happened in 2018 for six months, Ribera considers that this is one of the elements to be studied “in an overall reform” and argues that if it is addressed it would be “provisionally”. In addition, three years ago the Executive introduced an exemption in the hydrocarbon tax to deactivate the tax known as the ‘green cent’ on fuels for electricity production.

It also highlights other measures that the Government is addressing in parallel, such as the National Fund for the Sustainability of the Electricity System (FNSSE), in parliamentary process, or the reduction of the CO2 dividend, in the draft law phase. According to the Executive, with two proposals, consumers could benefit from a reduction in the final cost of the electricity bill of up to 15%.

They pay the energy

The energy companies will face the payment of about 8,000 million euros. Specifically, the plan to reduce so-called benefits from heaven (windfall profits, in English) of the nuclear, hydraulic and wind power plants will mean a cut of 1,000 million euros in the remuneration they receive, while through the FNSSE they will have to assume the costs associated with the specific remuneration scheme for renewables, cogeneration and waste (Recore) , between 6,500 and 7,000 million.

The Vice President of Economic Affairs, Nadia Calviño, justifies the tax reduction on electricity to avoid that “the industrial sector and consumers are harmed.” However, Calviño has not gone into details or specified what deadlines are being handled. For her part, the Minister of Finance, María Jesús Montero, assures that “they have been reviewing” the taxation of the electricity system for a few days and was confident that the current “specific peak” of the rise in the cost of electricity “can be overcome, just like it happened at the beginning of this year in the middle of a storm Filomena ”.

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