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VAT on domestic electricity supply to be reduced to 6% - but not for all

electricityThe Council of Ministers is expected to approve a decrease in VAT on electricity from 23% to 6%, now that Brussels has given the green light to the reduction.

The decrease in VAT is only for those customers whose contracted power is 3.45 kva.

The measure, which was entered in the 2019 State Budget, should cover around three million families for electricity and 1.4 million for a deduction in VAT on gas.

If consumers choose to lower the power to 3.45 kva, as suggested by the Environment Minister, João Matos Fernandes, they will be included in the VAT reduction.

"I suppose the vast majority of the Portuguese do not know what contracted power they have at home. And the one that has, most of the time, does not correspond to an informed choice but to a decision of the electricity marketer. It is normal for this to be so, but it’s not good," Matos Fernandes said last November.

For consumers, the drop in VAT to the minimum rate will save 85 cents a month in the regulated market - €10 a year.

The Ministry of Finance reckons the measure will costs €19 million in loss of tax revenue, as detailed in the Stability and Growth Program.

Energy consumers have already had a drop in prices this year with Endesa, Goldenergy, Galp and EDP lowering prices.

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Comments  

+4 #6 DAVID PIMBLETT 2019-04-28 08:21
when the VAT on electricity was raised to 23% there was hardly a murmer: The French would have been putting on their dayglo jackets and rioting but the Portuguese are just like the English and maybe write a letter to their local paper and that is as far as it goes
+1 #5 Gortty Yotty 2019-04-26 12:16
Unless one has one's own sophisticated high-rated generator, most marinas provide a 13amp (single phase) shore supply. To boil an electric kettle requires 'load shedding' and one must be careful to watch one's ammeter and voltmeter. Most non-sailors regard mariners as sea gypsies (and most of the others regard them as super-rich holidaymakers) although we manage to be not only clean, but also are environment conservationists, using only bottled gas, with wind generators and solar panels as well... (I will not go into the costs of 12v or 24v light bulbs, etc.) Suffice to say that one can do with less power and less water, too. We damp down in the shower, wash and shampoo with the water off, then rinse. Same with teeth-brushing. That's just the tip of this iceberg.
+8 #4 chief 2019-04-25 10:57
Quoting David Norton:
I live in a 2 bedroom apartment and the IVA on my last edp bill was €13.23 for the month. Extrapolate back from 23% to 6% and I would have saved €9.77 I believe, i.e. a rate of €117 per year. However to run the normal appliances a modern T2 has I have a contracted power of 6,9kva (it is printed on the 1st page of every bill in the bottom left hand corner so to say people don't know their own means he has never looked at his own bill). So to qualify for the new IVA rate I have to reduce to a half and live in the dark or not cook I assume.

I think most modern houses/apartments will have a over 3.45kva supply
+9 #3 chief 2019-04-25 10:54
"three million families for electricity and 1.4 million for a deduction in VAT on gas" and will save 85 cents a month or 10 euros a year, "The Ministry of Finance reckons the measure will costs €19 million in loss of tax revenue, as detailed in the Stability and Growth Program" thinks someone needs a new battery in their calculator
+7 #2 Joel Reiver 2019-04-25 10:34
Political ineptitude is not limited to May and Macron, the Portuguese environment minister obviously does not live in the same world as the rest of us and has not tried living with 3.45 kva, the extra time required to even boil a kettle with 3.45 kva as opposed to 6.9 kva when everyone in the area is trying to get meals ready at similar times totally negates any IVA saving.
+9 #1 David Norton 2019-04-24 17:49
I live in a 2 bedroom apartment and the IVA on my last edp bill was €13.23 for the month. Extrapolate back from 23% to 6% and I would have saved €9.77 I believe, i.e. a rate of €117 per year. However to run the normal appliances a modern T2 has I have a contracted power of 6,9kva (it is printed on the 1st page of every bill in the bottom left hand corner so to say people don't know their own means he has never looked at his own bill). So to qualify for the new IVA rate I have to reduce to a half and live in the dark or not cook I assume.

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