Belgian finance minister Vincent Van Peteghem (Flemish Christian democrat) has finalised plans for the new format energy bill. Average energy bills are set to rise 20 euros a month as a result of duty changes, but counters Mr Van Peteghem “the rise would have been 50 euros extra a month if reforms were not carried out”. The VAT reduction from 21% to 6% introduced to soften the blow of spiralling energy prices triggered by Russia’s war on Ukraine becomes a permanent feature.
Under the new system a distinction is made between “basic energy consumption” and “extra energy consumption”. Duty on basic consumption will fall when energy prices rise above a certain level.
Duty on extra consumption won’t be cut. The government says that won’t mean it’s raking in extra cash because any additional revenue generated as a result of VAT on higher prices will be needed to pay for the duty cut on basic consumption.
When gas prices fall under a certain level, duty on extra consumption will rise. It’s a measure intended to encourage energy transition and wean people off gas.