.’s new plan Government to contain increases in Electricity Bills takes shape. in a maneuver Which is due to be shown today in Parliament, Palazzo Chigi and Tesoro set aside another 2 billion euros for the cost of energy, after nearly 5 billion of interventions in July and September. The government intends to intervenevalue added tax. A large portion of the tax that weighs on the bill, both for domestic consumers and for small and medium-sized enterprises, will be “sterilized”. In practice, today VAT is paid on the so-called System fee.
In fact, today VAT is paid on the total bill, and therefore on the cost of energy consumed and a whole series of costs not directly related to the “raw material” purchased. These are items in the bill and, therefore, paid by all end users, which are used to cover costs related to activities of general interest to the electricity system. The list is very long. They range from incentives to renewables, to encouraging production from non-biodegradable waste, from nuclear energy safety to regional compensation measures, and the transition from recognized tariff concessions for the railway sector to electric bonus For families most in need. In short, the fee that has a more “tax” nature, because it has nothing to do with the good that consumers buy (electricity), but the latter still pays the 10 percent value-added tax on them. Kind of tax on tax. In the past, the legality of applying VAT to system fees and production fees has already been discussed. Now the government has decided to cancel the tax to contain the increases planned for next year. The $2 billion for the maneuver should be enough to complete this process.
The weight of the system fee on the bill in 2020 was about 30 percent, 14 billion on a total bill of more than 40 billion. In 2021, the weight was reduced due to government interventions that halved fees in the third quarter, reduced them to 11% of the bill (also see chart on the page) and eliminated them in the fourth quarter. Therefore, sterilizing the VAT would help contain the increases, but they may not be enough. That’s because on January 1, the aid granted by the July and September decrees, with which the government allocated just under $5 billion to curb energy price increases in the last two quarters of 2021, will expire.
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Therefore, in 2022, a double effect will be added: a new increase in energy prices and the end of government assistance. For this reason, in addition to the 2 billion allocated in the maneuver that must be used to sterilize the VAT on system fees, Palazzo Chigi and the Treasury will be willing to allocate to contain the bills, also about 1.5 billion euros drawn from auctions for Co2.
The price of “pollution rights” sold to companies continues to rise. The proceeds are collected directly by the state which can therefore be allocated to lower bills, as it has already done in both the July and September measures. Yesterday, at the end of the Ecofin, Economy Minister Daniel Franco made it clear that the government expects a “peak” in energy prices by the end of the year. “Then the prices go down again,” he said. “Let’s see,” he concluded, “what speed.”