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Lowering the VAT rate on electricity is not exactly a new issue, but today the Government has approved its reduction. This Thursday, the Council of Ministers announced that the reduction of VAT on electricity has been approved and that this measure will come into effect on December 1 of this year.
VAT will go from 23% to 13% up to certain levels of consumption.
In the midst of a pandemic, good news is needed! Today the Council of Ministers has announced that it has approved the reduction of VAT on electricity. According to the information, the rate will go from 23% to 13% up to certain levels of consumption. It should be noted that this was a commitment that was already defined in the 2020 State Budget.
VAT rate with progressive change
This change will be progressive. Up to the first 100 kilowatts consumed per month, the rate is reduced from 23% to 13%. For the highest consumption, the highest rate is maintained, 23%. For larger households, a 50% surcharge applies.
In these cases, families will benefit from a lower VAT rate of up to 150 kilowatts per month. It should be noted that the increase for large families does not come into effect until March 2021.
The Minister of Finance, João Leão, said at a press conference that this ...
It is a socially fair and environmentally and financially responsible measure. It is socially fair because it reduces the rate for lower VAT brackets, allowing significant savings for consumers.
At the end of the day, the estimated annual saving is, on average, 18 euros for non-large families and about 27 euros for large families.
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