Consumer pressure group, DECO, argues that the VAT rate should be set at 6% for all energy and that reverting to the intermediate rate of 13% is not good enough.
"We see no reason for an essential service such as energy to continue to be taxed at 23%. And, let's face it, the 13% interim rate is not enough to offset all the sacrifices consumers have made,” thunders the organisation, adding:
“The Portuguese will only accept and understand that a reduction to 6% for all domestic energy: electricity, natural gas and bottled gas - which 70% of Portuguese families have no choice but to use."
DECO said that in 2011 the government made a deal with the Troika that Portugal received €78 billion in exchange for ensuring the "good health" of the public accounts.
This was the excuse needed for the Passos Coelho coalition government to jack up the VAT on energy bills to the highest rate - 23%.
"Seven years later, VAT remains at its maximum, a measure that has a major impact on household running costs and the quality of life," the association said.
For DECO, with an eye to the 2019 State budget that currently is being formulated , discussion on the reduction of VAT on energy "is not new", but "has always been rejected" in successive State despite a drop in energy VAT being “a basic social justice.”
The Socialist Party government has made moves to reduce the additional cost elements that make up consumers' energy invoices, which, when VAT is added, represent an additional levy of up to 50% but is loath to reduce VAT, using the hackneyed excuse that "this tax revenue has to come from somewhere."
The thought that excessive State spending could be reduced and that the money released from a lower VAT rate would be spent by consumers in the general economy, usually is dismissed as an inconvenient theory.
