Nicolas Maeterlinck

VAT on energy to remain at 6% permanently

The Federal Inner Cabinet has agreed that what was a temporary reduction in the level of VAT levied on gas and electricity is to become permanent. The reduction in the level of VAT on gas and electricity was introduced earlier this year as a way of helping households cope with the spiraling cost of energy. Now the Federal Government has decided that it should become permanent. However, from next April excise duty will be levied on electricity and gas if their price falls bellow a certain level.  

The Federal Cabinet has reached agreement on the permanent reduction of the level of VAT that is levied on gas and electricity from 21% to 6%. However, from April next year consumers will pay excise duty on their electricity and gas if the price falls below a certain level. 

The lower the price, the higher the level of duty that will be levied. As energy prices rise the level of duty will fall. If, as is the case now, prices are extremely high, no duty will be levied. The system is already used for petrol and diesel. The level of duty levied will be higher for those that use a lot of electricity and/or gas and lower for those whose energy consumption is more modest.

The exact details of the measures will be announced in full during the Federal Prime Minister Alexander De Croo’s (Flemish liberal) policy statement that will be delivered in the Federal Parliament next Tuesday.

 

Top stories