Latvian EM to propose reducing VAT for natural gas

On Monday, the Ministry of Economics (EM) will propose to reduce the value-added tax (VAT) rate from the current 21% to 5% not only for electricity but also for natural gas, the EM representatives told LETA December 10.

As reported, natural gas tariffs for households will rise from 1 January 2022, depending on the amount of consumption, from 54.2% to 93%.

On Monday, December 13, the coalition is scheduled to discuss the possibility of reducing VAT to 5% for electricity and natural gas. The Ministry will also encourage a reduction of the electricity distribution tariff, which would be important for economic operators.

In November the average electricity price in Latvia's trading area reached a new historical peak of EUR 125.39 per megawatt hour, according to an overview of the Latvian electricity market prepared by Latvian transmission system operator “High Voltage Network”.

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