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Proposal: VAT rate on electricity would be reduced and passenger transport would be exempt from tax

Temporary changes are proposed to the Value Added Tax Act. The VAT rate applicable to electricity would be reduced from 24 percent to 10 percent. In addition, domestic passenger transport would be exempt from tax with the right to deduct the tax included in purchases (so-called zero tax rate). The aim of the government’s proposal, which is being submitted for a statement, is to compensate especially the costs caused by the sharp increase in the price of electricity and to improve the purchasing power of households during a period of strong inflation.

Proposals regarding value added taxation were outlined in the negotiations regarding the 2023 budget   proposal of Prime Minister Sanna Marini’s government at the beginning of September.

Source vm.fi

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