Spain to slash VAT on electricity as power prices surge
MADRID, June 21 (Reuters) - Spain's government is preparing to more than halve the value-added tax on electricity to 10% from 21% to provide immediate relief for consumers amid rising energy prices, said the Unidas Podemos party, junior partner in the leftist ruling coalition.
The reduction, which could be temporary, should be approved by the cabinet on Tuesday and comes after weeks of sharp rises in electricity prices, driven by high demand due to hot summer temperatures, among other factors.
"More needs to be done, but this will bring immediate relief for millions of families and small businesses and is great news," tweeted Pablo Echenique, parliamentary spokesman for Unidas Podemos.
Government officials were not immediately available to provide more details.
At the beginning of June, the government proposed two reforms in the energy market to try to alleviate the burden of the power bill on consumers' pockets, but they will not be approved before the end of the year.
The rise in electricity prices coincided with a new formula for calculating household consumption by time slots that has caused a lot of controversy among the clients, who fear that it will also lead to higher increases.
Spain taxes energy consumption with two levies: one on electricity generation, of 5.1%, and value-added tax of 21% on the final amount. (Reporting by Belén Carreño, editing by Andrei Khalip)
