Spanish Government Refuses To Lower The VAT On Electric After A Sharp Increase In Consumer Prices

SPANISH Government Refuses To Lower The VAT On Electric After A Sharp Increase In Consumer Prices this week

In a period when electricity prices in Spain have just seen the highest rise ever, with a 27 per cent increase in price announced only last week, today (Tuesday 12) the Spanish Government refused to drop the IVA (VAT) tax on electricity from 21 per cent to the requested 10 per cent.

María Jesús Montero, the Minister of Finance and Government, during the meeting of the Council of Ministers, stated that 21 per cent VAT is a figure set by Brussels under EU law, and is something that the government would not be allowed to go against.

José Miguel Fernández Viadero, the regional senator and regional deputy of the PRC, along with other senators from political parties including Teruel Existe, Unión del Pueblo Navarro and Partido Aragonés, had urged María Jesús Montero to apply a reduced rate of 10% VAT to electricity and natural gas “to equate the electricity bill in the national territory to the European average”.

Montero gave the reason for the increase as being necessary due to the severe weather conditions last week creating a higher peak demand on the power supply grid, and that the increase was a temporary ‘one-off’ case, as she tried to downplay the action saying that the Executive will work ‘without rest’, so that by the end of the year the electricity rate, especially for homes, would drop to 13 per cent.


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Written by

Chris King

Originally from Wales, Chris spent years on the Costa del Sol before moving to the Algarve where he is a web reporter for The Euro Weekly News covering international and Spanish national news. Got a news story you want to share? Then get in touch at [email protected]


    • John McLean

      13 January 2021 • 13:23

      The Finance and government minister Says the increase in price of 27% is because of the bad weather and the increased demand! I assume that means as soon as the weather warms up and the demand decreases the price will go down by27%. Oh! look a pig has just flown past the window!

    • DJH

      13 January 2021 • 18:16

      So it was put up for increased demand?????
      And will be reduced by half the amount raised????
      Reduction in twelve months????

      Not saying that Spain has one of the highest prices in Europe, sorry yes I am. Even if you wanted to generate your own electric you are penalised, so much for sustainability and fairness.
      All of the above is totally illogical and counter to all, especially those on the lower end bracket.

    • Steve Hunt

      13 January 2021 • 20:30

      So let me get this straight……the more you buy of a product then they increase the price….new one on me!!

    • Neil Friday

      14 January 2021 • 16:36

      Such inaccuracy from M.J. Montero, as back in 1990, John Major added 15% VAT onto utilities. Then we had if I recall, Tony Blair post 1997, took it down to 4-5%, which (once VAT was initially applied) the lowest that was possible. However the Spanish IVA brings in about a third of all government income.

    • Cedric Metliss

      16 January 2021 • 11:54

      Well it makes a change that Brexit isn’t being blamed. Just another EU scam whereby they increase utility prices then cream off the increase tax on the purchases so that they can pretend that it’s not their fault.
      Let the Spanish government publish a list of electricity prices in all 27 member states to show that all the prices are the same, and that all states are charging IVA at 21%.
      Lie a previous commentator, the number of flying PIGS has ust increased


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