Pedro Sánchez announces a new reduction in VAT on electricity, which will go from 10% to 5% | Spain

The President of the Government, Pedro Sánchez, has given a blow to the Government’s control session this Wednesday with the announcement of a reduction in VAT on electricity from 10% to 5%, which will be approved this Saturday in the Council of extraordinary ministers. The measure was announced during a response to the Esquerra Republicana de Catalunya (ERC), whose spokesman, Gabriel Rufián, had previously asked the chief executive to act in the face of rising inflation because it can “sweep” the executive and left-wing formations . The PP has recalled that its formation had raised that reduction two weeks ago and that the Government had rejected it. The parliamentary session has been marked by the electoral hangover from the Andalusian elections, in which the PP achieved a historic victory in the most populous territory in the country and one of the bastions of the Socialists.

The prospect of a long war and high energy prices for longer has forced La Moncloa to move again. The VAT reduction on electricity bills, which will go from 10% to 5%, will reduce the fiscal pressure for all electricity consumers, both domestic and business, regardless of the type of contract they have. It will affect the free market as well as the regulated one, regardless of what they consume. Until just a year ago, when the Government took the first step of tax reduction, electricity was subject to the general rate of VAT (21%). So, the rate became 10% and now it goes back down to 5%. In addition to lowering VAT, in June of last year the Executive abolished the electricity generation tax, from 7%, and left the special tax at 0.5%, compared to the usual 5.1%. It is the minimum allowed by community legislation.

The measure announced by Sánchez was included in the economic plan that the leader of the PP, Alberto Núñez Feijóo, presented to the Prime Minister at the end of April, two weeks after their meeting in La Moncloa. The popular spokesman in the Senate, Javier Maroto, recalled that the third vice president, Teresa Ribera, rejected the PP proposal to lower the VAT on electricity and natural gas to 5% at the beginning of June, considering it “cosmetic” and ” insufficient”. At that time, Ribera opted to “transform the model” of energy, electrification and efficiency, reports Elsa G. Blas.

Podemos calls for “much more courageous” measures

The government partner of the socialists, United We Can, has asked the Executive for “much braver measures” than the VAT reduction. “It is not bad, but it is very insufficient to protect families from inflation and for the Government to recover the political initiative. Much more courageous measures must be taken, such as a 300-euro check for families and a 10-euro transport pass, and we think that the large electricity companies and the large oil companies have to pay for this with more taxes,” he reacted in the halls of Congress. the parliamentary spokesman for the purple party, Pablo Echenique. Party sources affirm that they were unaware of the proposal announced this Wednesday by Sánchez. The two parties continue to negotiate the decree that the Council of Ministers will approve on Saturday, reports Paula Chouza.

On the contrary, sources from the second vice-presidency —the one headed by Yolanda Díaz— do, on the contrary, claim to have been aware of the measure before Sánchez’s intervention and insist that it cannot be the only solution. “We will continue working to make an ambitious royal decree that reaches the pockets of families”, they affirm in reference to the reduction of the transport subscription, the family check and “urgently” the tax increase to large energy companies.

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From ERC —a fundamental ally for the Government in Congress—, Rufián, has been interested in “how the coalition Executive intends to end the legislature.” In his response, the president has defended that his cabinet has been “protecting families” for two and a half years, first from a pandemic and after the consequences of the war in Ukraine. And he has taken the opportunity to insist on his intention to continue “opening a dialogue with Catalonia” to “reestablish bridges and try to rebuild coexistence” after the crisis opened by the frustrated independence process, but Rufián has focused on the economy. “You have not understood my question,” he replied, before warning him that inflation could “wipe out” the government and also the left-wing formations.

The PP sees the Government “exhausted and failed”

The focus of the opposition has been on the difficult parliamentary arithmetic of the coalition and on the economic effects on Spanish families derived from the war in Ukraine. The general secretary of the PP, Cuca Gamarra, has started asking “what else has to happen for the Government to rectify”. After the absolute majority of Juan Manuel Moreno in Andalusia, Sánchez has quoted the writer José Saramago in the lower house: “The defeats have something positive and that is that they are never definitive. And the victories have something negative, and that is that they are never definitive”.

The popular spokeswoman has insisted that the Government is “exhausted and failed” and has asked Sánchez to open up to the policies proposed by Feijóo. “What does it mean to rectify for the PP? Because it gives me the feeling that it is social backwardness. This Government was formed so as not to repeat the disaster”, has maintained the head of the Executive, who has promised to continue raising the minimum interprofessional salary and pensions, although the PP, he has said, wants to freeze them, and has recalled the impact of the pandemic and war in the legislature.

The Government has multiplied its activity this week to leave behind the fiasco in the Andalusians and has convened an extraordinary Council of Ministers this Saturday to advance the approval of measures against inflation, the new decree to deal with the war in Ukraine. Sánchez participates on Thursday and Friday in the EU summit. He is also trying to redirect, with a meeting this Wednesday afternoon in Madrid, the bilateral dialogue with the Generalitat after weeks of great tension. The Minister of the Presidency, Félix Bolaños, and the Minister of the Presidency of the Government, Laura Vilagrà, will meet at La Moncloa at 4:00 p.m., and will later appear separately before the press. After the control session, the President of the Government has traveled to the burned area of ​​the Sierra de la Culebra (Zamora), where some 30,000 hectares of surface have been burned to see the dimensions of one of the most serious fires recorded in Spain .