VAT reduction on gas

by Lorraine Williamson
VAT reduction

MADRID – The Government has approved in the Council of Ministers the greatest reduction in VAT on gas. This goes from 21% to 5% as of October.

The measure, which will last until at least December 31 this year, will save consumers €190 million. Furthermore, the Executive has allocated more than €172 million to the reinforcement of Primary Care.

Reduction on VAT on gas

The Council of Ministers has approved a series of urgent measures in the field of energy. One such measure is the reduction of the VAT applicable to natural gas supplies from 21% to 5%. This reduction will come into effect as of October 1 until at least December 31, 2022. This is the largest tax cut in history on this matter.

The goal is to soften the impact of rising energy prices caused by the Russian invasion of Ukraine. The initiative will save consumers around €190 million in four months. Moreover, it will also be applied to pellets, briquettes and firewood. As such, this which will mean an estimated further saving of €19.4 million. These reductions will be added to the 80% reduction in taxes linked to electricity, which has reduced family spending by more than €10,000 million.

Cogesa Expats

Other approved measures are the possibility for cogeneration to temporarily abandon its regulated remuneration regime. The Iberian Mechanism will then be applied to it, and the creation of a new service for active demand response that will increase the flexibility and security of the electricity system.


In the health field, the Government has authorised the territorial distribution of €172.4 million. This is to be used for the development of the Primary and Community Care Action Plan 2022-2023. Furthermore, these funds seek to increase the resolution capacity of Primary Care, promote quality care and reinforce health promotion and prevention. Consequently, the Plan is the main element of one of the reforms included in the Recovery, Transformation and Resilience Plan.

Unaccompanied migrant children

Also, the Council of Ministers has granted the Canary Islands and Ceuta and Melilla a subsidy of €15 million to care for unaccompanied migrant children and adolescents. Furthermore, it has approved the Operational Plan for the protection of the human rights of women and girls victims of trafficking, sexual exploitation and in contexts of prostitution.


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