Families save 110 euros per year with reduced VAT on energy, Deco estimates – The Economic Journal

Families save 110 euros per year with reduced VAT on energy, Deco estimates - The Economic Journal


The Portuguese Association for Consumer Protection (Deco Proteste) estimates that around four million Portuguese families are able to save an average of 110 euros per year with the reduction of Value Added Tax (VAT) on domestic energy (electricity, natural gas and bottled gas) to 6% in Mainland Portugal, 5% in Madeira and 4% in the Azores.

The association considers that the reduction of the tax "is a political rather than a budgetary issue", taking into account that "little or nothing was reflected in some decisions that would reduce production costs by several hundred million Euros". "Let's take a look at the CMEC (Maintenance Costs for Contractual Equilibrium), which, according to the sector regulator, will have cost Portugal 510 million euros from 2007 to 2017 through overcompensation," exemplifies Deco.

According to the organization, in a statement released on Thursday, the measure represents a budget deficit for households of 440 million euros, considering the consumption in Low Voltage Normal, which will be transferred to the Portuguese economy through means other than this Supervisor.

Deco Proteste said Friday that VAT on bottled gas would drop from 23% to 6% because it is an "essential service" that is being "taxed as luxury". Today, it says that about 50 thousand Portuguese who have joined the movement "Enough!" To reduce this rate.



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