Center leader: Reform opposes electricity VAT cut

Jüri Ratas (Center).
Jüri Ratas (Center). Source: Ken Mürk/ERR

The Reform Party will not budge on a proposal to cut VAT on electricity, Jüri Ratas, leader of that party's coalition partner, Center, says.

"If we are talking about reducing VAT from 20 percent to nine percent, there is no agreement on that as of today," Ratas, who is also Riigikogu speaker, told ERR Thursday.

Center had propsoed making the move amid soaring electricity prices, while the opposition Isamaa party has tabled a bill to do the same.

No specific other agreements had yet been reached with the Reform Party on the enery prices issue, Ratas added, though common ground may be found on extending support for low-income households.

He said: "Currently [support is issued to households with an income below] a little less than €700, and we are ready to discuss raising that. This new limit could be minimal at the median salary, but I think it could also be seriously considered that it could also provide relief to people who earn an average income in Estonia."

Economics affairs minister Taavi Aas (Center) said Wednesday that nearly doubling the threshold to €1,200 in household income per month – below which a household would qualify support – was viable.

Ratas said Thursday that: "These thresholds are set using net income. So this is either at the median, which is currently somewhere around €1,100, or at an average wage, which is a little less than €1,300 net."

The cabinet is due to receive an overview from stakeholder companies Thursday, Ratas, who as speaker does not sit in the cabinet, said.

The coalition council made up of the Reform and Center leadership will also convene where necessary, Ratas added.

Fears of an electricity price of €1,000 per MWh have not yet materialized as forecast earlier in the week, though the price of electricity was still over €469 per MWh at that point – it has dropped somewhat since then – while natural gas is also at record price levels.

Reform's finance minister Keit Pentus-Rosimannus called the proposal to slash VAT on all energy bills one which would make a mockery of the public and which would make little difference to monthly bills.

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Editor: Andrew Whyte

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