Your energy bill could increase by €20/month in April because the State wants to… compensate for the reduction in VAT

Your energy bill could increase by €20/month in April because the State wants to… compensate for the reduction in VAT

It’s a situation that seems absurd… The financial authorities of our country are reducing the VAT on gas and electricity, from 21% to 6%, following the exorbitant prices that we have been suffering for more than a year. But could recover part via excise, another form of tax.

This drop in VAT inevitably led to a loss of tax revenue for the State. It is estimated at 1.3 billion euros for the year 2023 if the rules do not change (but at the end of March, they were supposed to return to the “pre-energy crisis” situation, in particular by reducing VAT to 21%) .

In short: the State is wondering how to continue to help citizens not to become poorer, without worsening its own financial situation (you are not unaware that the public debt is gigantic since the covid crisis, which precedes the energy crisis).

The solution envisaged by the Minister of Finance, Vincent Van Peteghem? A tax parade, write several dailies this Wednesday morning. Namely, maintaining VAT at 6% on April 1, but adding excise duties which would correspond, according to estimates, to €20 per month for an average family. A compensation mechanism that would be abolished if energy prices rise above €250/MWh for electricity and €100/MWh for gas.

However, as pointed out in particular by the Last Hour, households that consume more than 3 MWh/year of electricity and 12 MWh/year of gas would no longer be protected by the said mechanism. Therefore, large families (3.5 MWh/year according to the Creg) would be penalized…

According to the Minister’s calculation, the bill for an average household would have increased by 512.58 euros this year if the VAT had risen to 21%. The current reform reduces this increase by 335.80 euros. The budgetary cost (loss of earnings) of the reform is nevertheless estimated at 761.7 million euros.