Energy tax cuts must benefit consumers, says German minister
Germany's Economic and Climate Minister has signalled that future tax cuts on electricity will have to be passed onto consumers.
The Greens' Robert Habeck said he wanted to guarantee that the scrapping of a key environmental tax would benefit people who were struggling with high energy costs.
According to DPA, his ministry is now looking into the legal obligations of energy suppliers with a view to ensuring that future savings were passed on to their customers.
Economy and Climate Minister Robert Habeck in Paris on Monday. Photo: picture alliance/dpa/AP | Michel Euler
The traffic light coalition of the Social Democrats (SPD), Greens and Free Democrats (FDP) wants to fully abolish the Renewable Energy Act (EEG) levy on energy bills by January 1st, 2023. The revenues from this tax, which are used to fund renewable energy projects like wind and solar, will then be reimbursed by the treasury.
The EEG levy has already been cut by 40 percent since the start of the year, but studies conducted by price comparison site Verivox have indicated that German customers are still experiencing huge rises in the cost of energy.
In a recent interview, the head of the German Taxpayers' Alliance called for VAT on energy to be cut from 19 percent to seven, along with further tax cuts on the electricity tax, which currently adds around seven percent to energy bills.
Speaking to DPA on Friday, Rainer Holznagel said the government could afford to cut taxes because the revenues would be compensated for by the current steep rises in energy prices.
READ ALSO: German Taxpayers’ Alliance calls for VAT cut to offset electricity costs
Since the recent cut, the EEG levy adds 3.7 cents per kilowatt hour onto energy bills.
Habeck said the government was looking into scrapping the levy entirely sooner than planned.
"If it is possible to bring forward the abolition of the EEG levy, then that should be tried," he said.
The government also plans to offer financial support to low-income households such as students and housing benefits recipients in summer.
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The Greens' Robert Habeck said he wanted to guarantee that the scrapping of a key environmental tax would benefit people who were struggling with high energy costs.
According to DPA, his ministry is now looking into the legal obligations of energy suppliers with a view to ensuring that future savings were passed on to their customers.
The traffic light coalition of the Social Democrats (SPD), Greens and Free Democrats (FDP) wants to fully abolish the Renewable Energy Act (EEG) levy on energy bills by January 1st, 2023. The revenues from this tax, which are used to fund renewable energy projects like wind and solar, will then be reimbursed by the treasury.
The EEG levy has already been cut by 40 percent since the start of the year, but studies conducted by price comparison site Verivox have indicated that German customers are still experiencing huge rises in the cost of energy.
In a recent interview, the head of the German Taxpayers' Alliance called for VAT on energy to be cut from 19 percent to seven, along with further tax cuts on the electricity tax, which currently adds around seven percent to energy bills.
Speaking to DPA on Friday, Rainer Holznagel said the government could afford to cut taxes because the revenues would be compensated for by the current steep rises in energy prices.
READ ALSO: German Taxpayers’ Alliance calls for VAT cut to offset electricity costs
Since the recent cut, the EEG levy adds 3.7 cents per kilowatt hour onto energy bills.
Habeck said the government was looking into scrapping the levy entirely sooner than planned.
"If it is possible to bring forward the abolition of the EEG levy, then that should be tried," he said.
The government also plans to offer financial support to low-income households such as students and housing benefits recipients in summer.
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