Reduction of VAT on contracted power only reduces invoice of light at 9 euros per year – The Economic Journal

Reduction of VAT on contracted power only reduces invoice of light at 9 euros per year - The Economic Journal


The reduction of VAT applied to the fixed component of the electricity bill gives an average decrease of 50 to 70 cents per month, a figure left on the left still considers very low. The negotiations continue and involve several other variables, including ISP.

The VAT of electricity should even lower, although not on the entire invoice, but only on the so-called fixed term, the power contracted. That is to say, the energy consumed is excluded from this drop, to the extent that, according to the Left Block (BE), it will relieve consumers of only € 9 per year. This solution should be combined with other measures such as the extension of the extraordinary contribution on the energy sector (EESC) to the renewable sector, which has been exempted since 2014, and the budgetary transfer of EUR 150 million from the revenue from this contribution to lower the tariff deficit. Negotiations continue and the final model can only be closed in the discussion in the specialty of the EO / 19 proposal.

MEP Mariana Mortágua, MP, exemplifies that the decrease in VAT of the part of the contracted power of the invoice, per se, is a measure that would be worth, on average, 9 euros per year, the equivalent of 0.60 cents or 0 , 70 cents on a monthly bill, not enough to lower the bill, even because the cost of electricity is rising a lot. "It is necessary to find here a set of measures at the level of the incomes, in the level of the taxation and the level of the tariff debt that has a real impact in the invoice", defended to this day, to three days before the delivery of the proposal of the OE / 19 in Parliament.

The confirmation of the measures under negotiation to lower the light bill arrived on Thursday evening, 11 October, by the voice of the parliamentary leader of the PCP: the down payment of the electricity will be made by a "combined solution" between the reduction of the tariff deficit and a reduction of VAT charged on the contracted power, and a taxation of renewables is still foreseen.

According to João Oliveira, the model and its size was not yet closed until yesterday.

In the combined solution, the reduction in light billing is achieved through the transfer of EUR 150 million from the EESC to lower the tariff deficit and thus lower the price of electricity. Already in the scenarios presented to the parties is a reduced rate of 6% for the lowest contracted power of 3.45 kVA, representing a loss of revenue of 50 million euros.

With regard to the renewables levy, the extension of the EESC to this sector, first hand made by the Economic Journal in the 28th September edition, means the end of the exemption from this tax, which has been scheduled since 2014, for special regime (PRE) production. A solution that will ensure a very reduced revenue, less than 30 million euros with its impact on the pockets of consumers to be felt in prices only in 2020, given that can only move forward in 2019.

Accounts made with these combined solutions are concerned less than EUR 230 million, lower than the EUR 250 million proposed by BE with the creation of a levy on renewable energy producers, a move that the blockholders have again insisted this year of 2017 to have been approved, but ended up falling with the retreat of the PS in a new vote.

He said that "there is an agreement to reduce the invoice of light," which was taken over by the government for some time, representing "a withdrawal of the executive from the official position of not touching the invoice of light, Mariana Mortágua, has already stressed that "it is necessary a combination of several measures" that allow a real impact on the electricity bill.

The bloc's deputy, Mariana Mortágua, points out here that the proposal to extend the EESC to the renewable energy sector "is a measure that has several technical problems" and represents "a very low income and with little impact on energy revenues."

"There is another alternative, which is a rate similar to that proposed by the bloc last year, and which focuses on the extra cost, the part of the income that is overpriced, and which can give a very considerable income, a abatement of very considerable tariff debt ".

The final model for lowering the energy bill may only be closed in the discussion in the OE / 19 specialty.

In recent weeks, the Government has been negotiating with BE and PCP on the extension of the EESC, which means the end of the exemption from this tax, which has been foreseen since 2014, for special regime (PRE) production.

Leftist parties kept the objective of reducing VAT on electricity and gas to 6% at the negotiating table, but the budgetary impact of the 500 million erosion measure has already led the Government to refrain from doing so. However, the VAT of electricity should even lower, although not on the entire invoice, but only on the so-called fixed term, the power contracted.

The prime minister signaled already in Parliament in response to Catarina Martins, coordinator of the BE: "We have to work and find a solution or until Monday [dia da entrega do orçamento no parlamento] or until the end of the general debate or until the end of the specialty debate so that we can find a good measure that allows us to continue to reduce the cost of energy. "

The EESC was created by the previous government and maintained by the current one, as a rate of 0.85% on the net assets that energy companies have in Portugal, providing for some exemptions that could end in 2019 for renewables.



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