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Inflation & Prices

Germany Slashes VAT on Gas to Ease Burden From Soaring Costs

  • Scholz’s government wants to offset impact of new gas levy
  • Measure could cost around 14 billion euros in lost revenue
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Germany will temporarily cut sales tax on natural gas to 7% from 19% to ease the burden on households and companies suffering due to surging energy costs and hit by a new levy taking effect in October.

Chancellor Olaf Scholz announced the move -- which could cost about 14 billion euros ($14.2 billion) in lost revenue -- in a brief statement to reporters Thursday in Berlin and said the government expects suppliers to pass the VAT reduction fully on to consumers. The lower rate will apply from Oct. 1 and expire at the end of March 2024.