The Government is rushing the final touches of its package of measures to cushion the economic impact of the war in Iran, in which it is considering including a reduction of the fuel VAT from 21% to 10%, according to sources familiar with the design of this plan have told Europa Press.
The Executive, which continues at this hour closing the loose ends of the measures that will be validated this Friday in an extraordinary Council of Ministers, also contemplates incorporating in this package tax cuts on the electricity bill, improvements in the electricity social bonus and additional guarantees on the energy supply, according to the same sources.
The possible reduction of VAT from 21% to 10% on fuels that the Government is considering including in its anti-crisis plan contrasts with the generalized bonus of 20 cents per liter of fuel that the Executive approved in 2022 to mitigate the consequences of the war in Ukraine.
The employers' associations and the gas station owners' associations had demanded from the Government that on this occasion it would opt for alleviating the tax burden on fuels, given the operational and management problems generated by the fuel bonus launched after Russia's invasion of Ukraine.
The anti-crisis package that is expected to be approved today will also abolish the special tax on hydrocarbons, will eliminate the special electricity tax, currently set at 5%, and will reduce the tax on the value of electricity production, according to SER chain.
Sánchez will detail the new anti-crisis plan
The President of the Government, Pedro Sánchez, will appear this Friday before the media after the meeting of the extraordinary Council of Ministers to explain the comprehensive response plan to the consequences of the war in Iran.
From the Executive, they emphasize that it will be a plan "proportional, delimited, and focused" on containing the impact of the rising cost of fuels and electricity.
After maintaining contacts with social agents, the sectors most hit by the conflict and the parliamentary groups, the Government will present a package that is articulated in four axes: structural measures, fiscal block, actions aimed at the most affected sectors and a social shield for the most vulnerable groups.
The first of these areas is the structural one and focuses on strengthening the commitment to renewable energies --promoting energy communities, self-consumption or heat pumps-- and the electrification of the economy.
The second dimension is aimed at reducing energy and electricity costs through fiscal instruments. The third block is linked to containing the impact of rising fuel prices, with special attention to agriculture, fishing, transporters, and electro-intensive and gas-intensive industries, while the last block includes social shield measures, such as the impossibility of energy supply cuts for the most vulnerable.
Furthermore, both the First Vice President and Minister of Finance, María Jesús Montero, and the Minister of Economy, Carlos Cuerpo, have already announced that the decree will not include initiatives such as the prohibition of evictions of vulnerable people nor the mandatory extension of rental contracts that expire this year and next, due to the lack of sufficient support in the Chamber to pass them.
Urgent processing in Congress next Thursday
The Congress will debate and submit to a vote next Thursday, March 26, this decree-law with measures to alleviate the economic consequences of the war in Iran.
As happens with every decree-law, its entry into force will be immediate, but subsequently it must be voted on in Congress for its validation or repeal within a maximum period of thirty days. However, the Board of Spokespersons has agreed that, when the decree-law reaches the Lower House, it be swiftly qualified by the Bureau of Congress to incorporate it into next week's Plenary Session and not delay the validation.
From the Government, they have insisted that this plan will have the necessary flexibility to go “adapting and adopting” the appropriate measures depending on how the situation evolves.