Energy prices in the Czech Republic: VAT to zero?

Energy prices are also rising in the Czech Republic. For this reason, Prime Minister Babis wants to reduce VAT to zero. His likely successor in office, Fiala, fears trouble with the EU.

“We will help people in such a way that they will practically not feel the rise in electricity prices,” promised Andrej Babis, the Czech Prime Minister, last Monday. You will help efficiently, quickly and in a targeted manner. “We have the option of reducing VAT from 21 percent to zero.”

Alena Schillerova, his finance minister, sounded a little more cautious: “I have been given the mandate to negotiate with the EU Commission on the conditions under which the VAT on energy prices can be reduced from 21 to ten percent EU economic commissioner is calling for a temporary zero tariff to be accepted. ” One wants to avoid possible sanctions against the Czech Republic.

VAT for electricity and gas to zero

Yesterday, the Finance Minister announced that the government had decided that VAT on electricity and gas would be set to zero not only by the end of this year, but by the end of 2022. A corresponding change in the law is now going to the House of Representatives. There was no longer any talk of the European Union or possible objections from Brussels.

However: The House of Representatives will not meet until November 8, for its constituent session after the election, and then with a new majority: the five center-right parties are working on a coalition led by ODS chairman Petr Fiala. He is to become the new head of government and is certain that the initiative will fail in Brussels: “A reduction in VAT to zero cannot succeed. That has to be negotiated with Brussels, which the government has not yet done.”

Relieve private households – but how?

But Fiala agrees that the burden on private households must be relieved. Since the spring, energy prices have also risen continuously in the Czech Republic. Electricity costs 20 percent more, natural gas ten percent. One larger and two smaller energy providers had to stop operating. Daniel Benes, the director of the semi-state energy company CES, expects that electricity prices will climb by a third and gas prices by up to 60 percent.

The prospective new head of government, Fiala, does not believe in a tax cut as an antidote: “There are better ways to help people who have problems with energy prices. For example, in the form of subsidies for housing costs.” Then one would have to look for further instruments to keep energy prices under control.

Fiala for nuclear energy

As far as long-term energy and climate policy is concerned, Fiala doesn’t sound much different than Babis: “We have to negotiate a change in its energy policy in the EU so that prices do not rise so much Countries like ours are accompanied by nuclear energy. “

The problem is the pace of the demanded phase-out of coal and gas. What Tomas Toth, head of CD Cargo, the freight subsidiary of the Czech Railways, confirmed unintentionally and indirectly: He reported on Twitter on Wednesday that there was an unprecedented demand for the transport of lignite to electricity and heating plants. And literally: “We do our best to keep the Czech Republic warm in winter.”