The Slovenian Government decided to reduce VAT on energy products for all users. The new tax rate will be 9.5 % and it will be applicable between 1 September 2022 and 31 May 2023.
The Government proposed the reduction of VAT on supplies of electricity, natural gas, firewood and district heating. By temporarily reducing the VAT rate from 22 % to 9.5 %, the Government is addressing the impact of energy price increases during the peak energy consumption period, the heating season. The lower rate applies to all consumers of these energy products, both residential and commercial.
Minister of Finance Klemen Bostjancic said that the lower VAT on electricity and natural gas adds to the measures already taken to regulate the prices of these energy products, but when it comes to firewood and district heating, the reduced VAT rate is the first such measure the Government is taking to mitigate price hikes. He added that VAT reductions cannot be applied to heating oil due to a European directive, and the Government has limited options for wood biomass, where it cannot regulate prices.
In the next steps, the Government will also address the regulation of heating oil and district heating prices.
The lower VAT will cost the state budget some 130 million euros, 40 million in 2022 and 90 million in 2023. On the other hand, the positive impact on households is expected to be between a few hundred euros and more than a thousand euros during the heating season.