German Finance Minister Christian Lindner has written to the European Commission requesting permission to waive VAT on a new gas price levy for a limited time, according to a copy of his letter obtained by Reuters on Sunday.
The level of the tax that Berlin is imposing on all gas consumers to share the additional cost of gas imports is due to be announced on Monday by Germany’s gas market operator.
The fee is intended to assist Uniper and other importers in dealing with increasing prices as a result of curtailed Russian export flows, but it would add to already sky-high energy prices and inflationary pressures for customers.
Under EU legislation, the charge is considered a component of the overall gas price, thus meaning it is required, which is why Germany must seek approval from Brussels to waive it.
‘VAT on government-imposed levies raises prices and is greeted with growing public hostility, particularly in the current unique scenario,’ he said.
“However, public support of tax rules is critical for their enforcement,” it concluded.
Since mid-June, Russia has severely reduced flows to Europe via the Nord Stream 1 pipeline, supplying only 20% of planned amounts, claiming malfunctioning and delayed equipment, while Europe claims the move is politically driven.
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