"21% VAT rate on our energy bill never to come back", says minister
You may have noticed it on your energy bill a couple of months ago: the tax on energy (both gas and electricity) being lowered from 21 to 6 percent made at least a small difference amidst the present price hikes. The question is how long this reduced rate will apply: will it be abolished next spring, as the state coffers are getting empty?
Speaking on the issue in the VRT's radio breakfast show "De ochtend", Frank Vandenbroucke said that "we have made a deal that we will discuss ways to make the reduced VAT rate on gas and electricity a permanent one. It should never return to 21 percent."
Excise duties can be manipulated easier by the taxman and allow more differentiation.
However, this does not mean that other types of taxation are excluded. The cabinets of federal Finance Minister Vincent Van Peteghem (Flemish christian democrat) and Energy Minister Tinne Van der Straeten (Flemish greens) are working on a so-called excise duties reform. These would be added to the VAT rate - of probably 6 percent - for both electricity and natural gas.
The reason for this is a technical one: excise duties is a type of tax that can be manipulated in an easier way. People investing in sustainable energy, such as solar panels or heat pumps, would enjoy a benefit. It is easier for the taxman to make a difference between big and small consumers, and to differentiate between electricity and gas, the latter being a fossil fuel that will have to abandoned for climate reasons.
If energy prices on the markets are volatile, excise duties can be adapted accordingly to ease the problem for consumers. A similar system was introduced for gasoline and diesel prices at fuel stations.
What will be the actual difference?
Pundits say that while all of this sounds promising, the system of excise duties will probably mean that you will pay as much tax as under a 21 percent VAT system once energy prices get back to normal. Read More...
