Spain to cut VAT on gas from 21% to 5% from October, PM Sanchez says

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The Spanish government will cut value-added tax (VAT) on gas to 5% from 21% from October to reduce the impact of rising gas prices on household utility bills, Prime Minister Pedro Sanchez said.

“So that our citizens’ heating bills are lower,” Sanchez said in an interview with local radio station Cadena SER. 

The government seeks to “fairly share the costs and charges of the war (in Ukraine)”.

Madrid residents welcomed the announcement but demanded long-term solutions.

“If we do not want nuclear energy we will have to bet on renewables”, said 71-years-old pensioner Concha Nogales.

Energy costs have skyrocketed since Russia invaded Ukraine in February, as Russia is a main supplier of natural gas to Europe for heating and power-generation. Russia calls its actions in Ukraine a “special operation”.

Spain has committed with European Union partners to reduce gas use by 7% though so far this year gas consumption in Spain has increased compared with last year.

Spain has reduced value-added tax on electricity twice over the past year.

Summer heatwaves have caused a spike in demand for electricity for cooling devices while also lowering hydro-power production – a significant energy source in Spain – because of the lack of water.


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