Tax reduction on gas consumption: badly done, Mr. Chancellor!
Created: 08/19/2022, 14:05
By: Thomas Schmidtutz
Chancellor Olaf Scholz (SPD) wants to significantly reduce VAT on gas.
A comment by Thomas Schmidtutz © Odd Andersen/afp/ (Montage)
In Berlin, fears of social unrest are growing in view of soaring energy prices.
The hasty shot to cut taxes on gas also shows how great the uneasiness is.
Munich/Berlin – In the fight against the sharp rise in gas prices, the federal government has just suffered a sensitive defeat in Brussels.
On Tuesday, the EU Commission rejected Finance Minister Christian Lindner's (FDP) request to exempt the planned gas surcharge from VAT - but not without giving Berlin a hint with the tax fence post as to what an EU-compliant regulation could look like.
Chancellor Olaf Scholz (SPD) is now picking up the ball from Brussels.
According to the plans presented by the coalition on Thursday, only seven percent VAT on gas should be due by April 2024 – instead of the previous 19 percent.
This, Scholz rejoiced on Thursday, relieves gas customers "much more than the additional burden caused by the gas levy".
Tax reduction on gas consumption: technically and politically next to it
The goal is correct.
But the coalition is again wrong in terms of craftsmanship and regulatory policy.
First of all, it is completely open whether the transfer of tax relief that Scholz hoped for and expressly warned of on Thursday will actually reach consumers in the end.
The experience with the tank discount does not bode well.
Secondly, the drastic price increases for electricity and gas are hitting low-income households particularly hard.
In the past few weeks, numerous economists had therefore pleaded for a quantity-dependent relief for poorer households.
The federal government would have reimbursed the additional costs for the necessary basic consumption.
Anyone consuming gas above the threshold pays the full market price.
That would have provided an incentive to use gas carefully.
And thirdly, the coalition is once again directly intervening in the market via the planned pricing.
A sharply rising gas price is an important signal.
Anyone who makes gas cheaper across the board dampens the incentive to save.
In the fight against the gas gap, this is the wrong way.
