The Federal Government of Belgium agrees to keep the VAT at 6% and impose an excise fee on energy

February 22, 2023

The Federal Cabinet of Belgium has agreed to changes in the taxation of energy expenses. The current temporary drop in the VAT rate from 21% to 6% will now be a lasting one. Gas and electricity will be subject to an excise tax to make up for the lost revenue to the exchequer. The cheaper “social tariff” for energy that had been extended to include the income group just above those in the lowest bracket will progressively be repealed. In order to assist this group in coping with the rising cost of gas and energy, the social tariff was expanded to include them.

Gas and energy VAT will be set permanently at 6% starting on April 1. In an effort to lessen the effect of the sharp increase in energy prices, the VAT on energy was reduced from 21% to 6%.

The move will become indefinite on April 1 after being extended several times. However, the Federal Government needed to figure out a way to make up for the income that will be lost as a result of a permanent decrease in the rate of VAT on electricity and gas. Gas and energy will be subject to an excise tax starting on April 1.

The introduction of excise duty and the gradual repeal of the social tariff for the aforementioned group will be delayed if the price of energy were to start to rise significantly again between now and 1 April, according to a kind of emergency break that the Federal Government has built into the measures.

A “basic package” of gas and electricity, which is sufficient for a household’s essential requirements, will be subject to one rate of duty; anything consumed in excess of this will be subject to a higher rate. The move will raise the average gas bill by 10 euros per month and the average electricity bill by 10 euros per month.

Source: VRT News
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