ZVEI
Electrical industry calls for VAT reduction on electricity too
In view of the sharp rise in electricity prices, the German electrical industry is calling for tax cuts from politicians and reforms to the electricity market.
"The price of electricity must finally be freed from all taxes and levies that burden prices," demanded Wolfgang Weber, CEO of the German Electrical and Electronic Manufacturers' Association(ZVEI), in Frankfurt on Monday (August 29). "Society and the economy are groaning under the high prices and must be relieved noticeably and in unison."
For example, VAT on electricity must be reduced to seven percent. As with gas - for which the reduced VAT rate applies until the end of March 2024 - this could happen in the short term. In addition, politicians should bring the electricity tax in line with the EU minimum and also abolish other levies after the EEG surcharge. It is also important to decouple the electricity price from the gas price. The merit order is increasingly becoming a problem, complained the ZVEI.
The merit order is the order in which the power plants bidding on the electricity exchange are deployed. Power plants that can produce electricity cheaply are used first in order to cover demand. These are wind power plants, for example. In the end, however, the price is based on the power plant that was switched on last and is therefore the most expensive - currently these are gas-fired power plants due to the high gas prices. As a result, electricity prices have also risen significantly.
Federal Economics Minister Robert Habeck (Greens) wants to reduce prices for consumers and industry by reforming the electricity market. The aim is to decouple the development of end customer prices for electricity from rising gas prices, a ministry spokesperson said on Friday. The merit order should remain, but the problematic effects for electricity customers should be changed.
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