After a long day in the Congress of Deputies, the Lower House this Thursday validated the Government’s decree law on fiscal and energy aid aimed at alleviating the economic impact of the war in Iran. The package of 80 measures, which will mobilize 5,000 million euros, has gone ahead with the only vote against Vox, the abstention of the PP and Podemos and the support of the rest of the chamber.
Tax reductions on energy and fuels
Among the main provisions is the reduction of VAT from 21% to 10% on fuels, electricity, natural gas and derived fuels such as briquettes and pellets. Added to this is the freezing of the maximum price of butane and propane cylinders, and the recovery of an 80% bonus on electricity tolls for large industry.
In parallel, the Executive has reduced the taxes that affect the price of gasoline and diesel to the minimum allowed by European regulations. In the electrical field, the suspension of the Tax on the Value of Electrical Energy Production (IVPEE), at 7%, is maintained and the Special Tax on Electricity is reduced from 5% to 0.5%, the community minimum.
Direct aid and employment protection
The plan also includes specific aid for the sectors most exposed to rising energy costs such as transporters, farmers, ranchers and fishermen who will receive a bonus of 20 cents per liter of professional diesel from the Tax Agency and the provincial treasuries.
Likewise, additional aid is established for the purchase of fertilizers, with the objective of “containing the prices of the shopping basket as much as possible,” according to the Executive.
At the labor level, the decree introduces a significant measure: the prohibition of objective layoffs linked to the economic consequences of the war in Iran, both for affected companies and for those that receive public aid within the framework of the plan.
The Government also reinforces the powers of the National Markets and Competition Commission (CNMC) to supervise and sanction companies that benefit from this aid, in order to avoid abusive practices. The body may monitor business margins in the fuel sector and, where appropriate, the Council of Ministers may establish limits on profits.
Boost to the energy transition
The decree also incorporates structural measures aimed at the energy transition. Specifically, tax deductions are introduced in personal income tax to encourage self-consumption, such as the installation of solar panels, and the electrification of the economy, including aid for charging points, heat pumps and efficient air conditioning systems.
Likewise, a 15% deduction in personal income tax is established for the purchase of electric and plug-in hybrid vehicles, in line with the strategy to reduce foreign energy dependence.