Spain extends energy tax cut until May 2022

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MADRID – Spain will extend a series of tax cuts to relieve consumers hit by skyrocketing energy bills until May 2022, government spokeswoman Isabel Rodriguez said on Tuesday.

The extension of the package of cuts, which was introduced in June and was due to expire at the end of the year, will have an impact of some 2 billion euros ($ 2.26 billion) in the first months of the year. next year, Rodriguez told reporters after the weekly cabinet meeting.

Strong demand for electricity as economies emerge from the pandemic, along with infrastructure failures and low inventories have pushed gas and electricity prices to record highs across Europe and it is little likely they will drop before the end of winter.

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“The outlook for wholesale electricity prices – which will hit a new record tomorrow – is not particularly promising,” Energy Minister Teresa Ribera said at the same press conference.

“It is fundamental to maintain the reductions and suspensions of certain taxes which are reflected in our electricity bills.

VAT on energy bills will remain at 10%, down from 21%, while a special tax on electricity will remain at 0.5% until April 30, Ribera said.

A 7% tax on electricity production, which is ultimately passed on to consumers, will remain suspended until the end of March.

($ 1 = 0.8860 euros) (Report by Inti Landauro and Emma Pinedo, edited by Nathan Allen, Kirsten Donovan)

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