The Czech government has authorized Finance Minister Alena Schillerová to waive Value Added Tax (VAT) on energy for the months of November and December due to rising energy prices.
Schillerová announced the decision at a press conference after a government meeting on the matter, adding that the move will cost the state budget 1 billion Czech crowns, or roughly 40 million euros. The VAT rate for energy is now 21 percent.
With this step, the government is responding to the increase in electricity and gas prices, which are affecting all of Europe. The typical Czech family, which pays 1.000 koruna (40 euros) a month for electricity, will save about 350 koruna (14 euros) on their bill for November and December, Schillerová said.
The tax waiver is made possible by a provision in the Czech tax code that allows the Minister of Finance to collectively waive tax payments in the event of extraordinary events, particularly natural disasters.
According to the minister, this step should be followed by an amendment to the VAT Act that comes into force on January 1, which will extend the zero VAT for a necessary period of time.
