The reduction in VAT on electricity from 10% to 5% that was announced this Wednesday by the Prime Minister, Pedro Sánchez, will have an immediate effect on the pockets of consumers immediately after its approval, since electricity bills will be reduced 5%, both for those who have the regulated rate and for those who have any of the rates offered by the distribution companies in the free market.
In any case, the reduction will have a limited impact, since the measure will in principle have an initial validity of three months, as explained by Treasury sources cited by the Servimedia agency. Although an extension is not ruled out depending on the market situation and the Government's ability to waive this income.
In the case of regulated rate users, the decrease will be added to the one set each day by the wholesale auction of the electricity market, which after the Iberian exception that caps the price of gas in combined cycle generation is barely 4% after two weeks of application. The Government calculated that this decrease would be at an average of 15%, a forecast that time will have to confirm.
Logically, the other consequence of the measure will be the revenue loss for the Treasury, which the Executive itself has calculated between 250 and 300 million euros in these three months. A cost that is added to the around 12,000 million euros lost in collection, in which the cost of the previous reduction in VAT on electricity from the general rate of 21% to the reduced rate of 10% is estimated.
Despite the fact that until now she had been reluctant to this measure, the Minister of Treasury and Public Function, María Jesús Montero, has argued in the control session with the Government in which Sánchez has announced the latest actions of the Executive entailed "the most important in the history of the electricity bill in Spain".
