Latvian minister to once again ask ruling coalition to cut VAT on heating this season

Latvian Minister of Economy Jānis Vitenbergs intends to once again ask coalition partners to approve reduced value added tax (VAT) rate for electricity, natural gas, heating energy and fuel lumber, as confirmed by the minister’s public relations advisor Ineta Vilistere-Lāce.
She said the proposal, which could be reviewed at a meeting of the coalition council next Monday, 17 January, provides for reducing the existing VAT rate of 21% for certain energy resources to 5% fore the period between 1 January 2022 and 30 April 2022. To reduce the tariff climb for households, the Ministry of Economy has developed a compensatory proposal – adopt a support mechanism for the heating season (1 January – 30 April) using the top permitted price ceiling calculation method for centralized heating supply and heating that uses gas as fuel.
«The situation with electricity, gas and heating bills both for households and entrepreneurs is dramatic. The support mechanisms put in place for electricity bills resolve the situation only partially. Consumers are worried about the end bills, which turned out particularly high this heating season. Even a slight reduction of each payment means helping to preserve residents’ solvency,» stresses the Minister of Economy.
Vilistere-Lāce notes that the ministry’s developed proposals to reduce the cost of energy resources is also supported by Latvian Association of Local Governments and Latvian Association of Large Cities. During the meeting this Friday, Vitenbergs, LPS chairman Gints Kaminskis, LLPA CEO Viktors Valainis and Minister of Welfare Gatis Eglītis discussed topics related to the reduction of energy poverty risks.
At the meeting LPS and LLPA also presented additional proposals for short-term loans for Latvian municipalities that require current assets for the procurement of resources necessary for the production of heating energy. They also outlined the need to improve public procurement of heating energy.
The Ministry of Welfare was also invited to expand housing benefits so that more people qualify for them.