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The proposal was hammered out on all TV sets. The National Rally (RN) wants to divide the rate of value added tax (VAT) by four on all essential products, reducing it from 20 to 5.5%. According to Bercy, in the gas segment alone, the measure will cost the State 2.3 billion euros, which is depriving itself of as much tax revenue. This amount will allow “restore oxygen” to the 10.528 million households consuming this energy, said the president of the RN, Jordan Bardella, candidate for the post of Prime Minister, during the presentation of his program on June 24.
Considering that the entirety of this reduction is passed on by suppliers, which is far from obvious, the gain reduced to the average annual consumption of households will amount to 125 euros per year, reveals a study by the comparator Selectra. According to the Energy Regulatory Commission (CRE), a household uses approximately 10 megawatt hours of gas, equivalent to the needs of a family of three in a 60 square meter apartment. With the RN, VAT on gas consumption will drop from 17.1 to 4.7 euros per megawatt hour. On an annual bill of 1,313 euros, the tax burden would thus drop from 173 euros to 47.5 euros. “This measure favors households with the greatest needs, the gains being proportional to consumption”underlines Maxime de La Raudière, general manager of the company Selectra, specialized in the comparison of gas and electricity offers.
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The VAT reduction on electricity and fuel will compensate
This gain, as important as it is, will not however absorb the very sharp increase in bills coming on July 1st. As CRE clarified, the benchmark price will increase by 11.7% due to the surge in transmission rates, but also under the effect of the increase in gas prices. As a reminder, the benchmark price is an indicative figure established by the sector regulator to allow households to compare the prices charged by different suppliers. It evaluates the average cost borne by the professional, for its supply activity.
Problem: this increase amounts to 130 euros on average for a similar profile. That is 5 euros more than the 125 euros of gains promised by the RN, still on an average bill. And as for the RN measure, this increase will be proportional to gas consumption. So that here too, households with the greatest energy needs will be more penalized.
