Finance Minister Christian Lindner has spoken out in favor of extending the energy price brakes until the end of April 2024. At the same time, the FDP leader is calling for the VAT on natural gas to be raised again.
Federal Finance Minister Christian Lindner also supports an extension of the electricity and gas price brakes until April 2024. “Since the price brakes should continue to exist according to the federal government’s common opinion, private households and businesses (…) continue to have protection against ruinous price peaks,” said the FDP leader today in the “Rheinische Post”.
Economics Minister Robert Habeck and Environment Minister Steffi Lemke had previously spoken out in favor of extending the measure, which actually expires at the end of the year. With the electricity and gas price brakes, the price for a large part of the consumption of private households is capped. The upper limit is 40 cents per kilowatt hour for electricity and 12 cents per kilowatt hour for gas.
Higher VAT burdens citizens with billions
In return, Lindner defended the government’s plan to bring forward the return to a VAT rate on gas of 19 percent from April 1 to January 1, 2024. The reduced VAT rate of seven percent currently applies. The increase will burden citizens with around 2.1 billion euros.
The finance minister argues that the earlier increase would generate additional revenue, which would also benefit the federal states. “They will receive more than one billion euros in additional income in 2024.”
Argument about that Growth Opportunities Act
The background to the planned increase is that the federal states want to reject the Growth Opportunities Act in the Bundesrat because the planned relief for companies will result in around two thirds of the tax losses for states and municipalities. Lindner wants to reduce the tax burden for companies by a good six billion euros per year.
The reduced revenue due to the Growth Opportunities Act would be “fully compensated for” by the higher VAT rate for gas brought forward, said Lindner. “I hope that countries can overcome their concerns about a revival of the economic climate.”