VAT on fuel, electricity and natural gas will be reduced in Spain from 21% to 10%, as part of a package of “drastic reduction in energy taxation” to respond to the impact of the war in the Middle East, the Government announced today.
This is one of the 80 measures that form part of a Comprehensive Response Plan for the crisis in the Middle East approved today by the Spanish Government in an extraordinary Council of Ministers, revealed the Prime Minister, Pedro Sánchez, at a press conference in Madrid.
In addition to measures “more of a cyclical nature”, mainly related to a “drastic reduction of all energy taxes”, the plan includes others “of a more structural nature”, to continue to encourage investments by individuals and companies in the decarbonization and electrification of the economy, in line with what the current Spanish Government has done over the last seven years, said Sánchez.
Overall, the plan will “mobilize” five billion euros, said Sánchez, who considered this to be the amount that, for now, “the illegal war” in the Middle East will cost the Spanish.
The cyclical measures, in immediate response to the impact of the war on energy prices, include, in addition to the reduction in Value Added Tax (VAT) on electricity, fuels and natural gas, the reduction or suspension of other taxes, such as the special tax on hydrocarbons and others on the production and consumption of electrical energy.
The package of measures also includes discounts and aid on diesel for transporters and the agricultural sector, as well as support for the purchase of fertilizers for agriculture.
In parallel, the executive will reinforce support for paying for electricity for families considered vulnerable.
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