42% rise in energy inflation in 2021 and Ukraine conflict prompts VAT cut plan
Belgium has confirmed a temporary cut in domestic electricity and natural gas Value Added Tax rate from the standard rate of 21% to 6%. This will apply between March and 30 September 2022. Only customers (households) with residential contracts can benefit from the measure. There will also be a short term excise tax cut on petrol and diesel, and an extension of the social gas or electricity tariff until September.
In addition, each household will receive an energy bill rebate of €100.
The headline Belgian inflation rate in December 2021 hit 6.5%, with energy inflation many times higher due to global gas shortages and economic recovery after the worst effects of the COVID-19 pandemic.
EU states reform VAT rate freedoms for economic crisis
In December 2021, EU finance minister agreed new reduced EU VAT rate setting freedoms which should come into place before April 2022.
The Finance Ministry is planning to put forward the measure to the Federal government to help combat inflation spike. Many other EU states cutting VAT on fuel. Belgium has in the past cut the VAT rate to 6% on energy fuel.
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