Home World Dear energy, Berlin launches a stinged tax for businesses and households

Dear energy, Berlin launches a stinged tax for businesses and households

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Dear energy, Berlin launches a stinged tax for businesses and households

From 1 October gas in Germany will cost more due to a new surcharge set by the federal government that will affect families and businesses: 2,419 cents more per kilowatt hour, equivalent to a drain of at least 5 billion for companies, from at least 8 billion of power d ‘purchase for private individuals in 2023. The Spd-Verdi-Fdp “semaphore” coalition decided in mid-August to increase the price of gas by law until April 2024: the measure aims at a fair redistribution of the high prices resulting from the collapse of supplies imposed by Russia. The surcharge enters the pockets of all consumers, not just those directly exposed to the Russian gas cut.

Unwanted cascade effect

This “gas surcharge“Was justified by the Minister of Economy and Climate Robert Habeck as a” bitter medicine “for the common good: it serves to save gas distributors and suppliers from certain bankruptcy, covering 90% of the additional costs on the market due to the increase of the gas price. However, the increase by law will have an undesirable cascade effect: it will push inflation upwards.

The Kiel economic think tank IfW estimates that the surcharge, which risks raising the VAT base without breaking the rule from Brussels, should increase the inflation rate by 0.9% by the end of the year, bringing inflation to area 9 percent. The economic research institute IMK has estimated for Handelsblatt that inflation could rise up to 10% at the end of the year, due to the surcharge. To stem this phenomenon, the liberal Finance Minister Christian Lindner sent a letter to EU Commissioner Paolo Gentiloni asking for an exception, to exempt VAT: applying European rules would mean increasing the VAT base by 2.419 cents per kilowatt hour.

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Distribution firms under stress

The 12 companies that supply gas to households and industries in Germany, including Uniper which requested and obtained aid from the state for several billion in order to avoid bankruptcy, are under enormous stress: they are contractually obliged to respect the terms of distribution. with long-term pre-established quantities and prices of gas, even when the low-priced Russian gas ran out, reduced by Moscow to 20% of the flow capacity of Nord Stream 1. The distribution companies are therefore forced to replace the Russian flow with gas much more expensive, without being able to pass this increase on to end users. The surcharge therefore serves to avert the systemic risk of a chain of insolvencies in the network of large and small suppliers that would have led to the collapse of the entire energy system in Germany, the BMWK ministry warned.

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Rising rain that displeases everyone

This drop of 2,419 cents is halfway on a fork between 1 and 5 euros: where 1 euro favored consumers, 5 euros for distributors. In the end, however, everyone was disappointed: the less well-off families and SMEs already tried by the rise in the price of electricity and food are now asking the government for more subsidies and concessions to mitigate the increases. For a family of four that consumes 20,000 kilowatt hours of gas per year, the surcharge of 2,419 cents is equivalent to an increase of 480 euros: the impact on citizens ranges from 120 to 580 euros per year, based on family unit and meters housing frameworks.

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