VAT on electricity and gas will likely remain at 6% for winter

VAT on electricity and gas will likely remain at 6% for winter
Credit: Belga

Belgium will very likely extend its temporary reduced VAT scheme (6% instead of 21%) a second time to keep the measure in force during the colder winter months.

Currently, the reduction of VAT on gas and electricity from 21% to 6% applies until 30 September. And while the Federal Government will evaluate the measure this summer, leader of the liberal Flemish Open VLD party Egbert Lachaert has few doubts that there will be an extension.

"The prices of gas and electricity are so high; it will not improve in the autumn," he said on VTM's television news broadcast on Sunday. "You cannot influence the fundamental prices. The government will have no choice but to extend the 6%."

Lachaert's statements are thought to mean that the extension of the measure throughout the winter is all but decided, as Open VLD was the party that was most sceptical about such a VAT reduction.

Permanent reduction?

In mid-March, the Federal Government announced the temporary reduction as part of a package of measures to counter the rising energy prices.

If the lowered VAT rate is maintained until the end of winter, it would be the second time that the measure has been extended. Initially, it was only valid until 30 June, but was recently extended to 30 September due to the ongoing war in Ukraine and the continued price rises.

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The socialist parties Vooruit and PS, as well as consumer organisation Test-Achats, have long been pressing for the VAT reduction to be made permanent, but Lachaert is not (yet) willing to go that far. "At the end of the day, someone will have to go and pay for all the free rounds that were bought."

Previously, experts criticised the fact that the VAT reduction would apply during the spring and summer months, while it would increase again from the end of September, just when temperatures start dropping and people turn on the heat more.

According to figures by Test-Achats, just over 80% of gas in Belgium is consumed during the colder months from the beginning of October to the end of March, and only 17% between April and September.

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