The Belgian government has reached an agreement on the price of energy

The Belgian government has reached an agreement on the price of energy

The federal government agreed on the night of Monday to Tuesday on several measures aimed at reducing the energy bill of households, faced with the sharp increase in gas and electricity prices. The content of this agreement was exposed during a press conference at 9:30 a.m. on Tuesday, February 1st. Concretely, in terms of energy, a consensus already existed on the extension of the extended social tariff, from which approximately one million low-income households benefit. The measure is extended until the end of June 2022.

Lower VAT

Faced with the current price spike, the government also wanted to help middle-income households who are struggling to pay their bills.

VAT on electricity will drop from 21% to 6% from March 1 to July 1. A measure that will cost 320 million euros in 4 months.

No reduction in VAT is planned for gas, the Greens not being in favour. An energy check of 100 euros will also be granted, as a “heating bonus”.

A reform of the VAT will then be carried out, which should be based on a ratchet system in order to modulate taxation on energy via excise duties.

Mini-tax shift

Concerning the mini-tax shift, the increase in purchasing power is 100 euros per year for single people earning less than 41,000 euros. The measure also targets couples with lower incomes: 100 euros per year for a gross taxable income of up to 82,000 euros per year.

Minister David Clarinval (MR) explains that the self-employed will also benefit from increased purchasing power: an envelope of 6.8 million euros has been released. The Minister specifies that he will submit a concrete project within the next 15 days.

Structural measures: an agreement by March

Regarding the structural measures, which relate more to the long term (reduction of excise duty when prices rise), Vivaldi expects to reach an agreement for March 1 – when the budget adjustment will begin. Minister Van Peteghem (CD&V) affirms that the government will pay consumers in full the excess profits reaped by the State via VAT and excise duties due to the rise in prices.

The press conference took place at the Prime Minister’s office, rue Ducale in Brussels. The Ministers of Finance and Energy, Vincent Van Peteghem and Tinne Van der Straeten, take part, as well as the Ministers of Social Affairs and the Independents, Frank Vandenbroucke and David Clarinval.

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