Germany to Reconsider Gas Levy Following Major Outcry
…Govt May Offer Support Selectively
A plan by the German government to add to consumers’ tax burden in order to shield gas importers from excessive prices may have prompted the economy minister, Robert Habeck, suggesting that the government would instead offer support selectively.
He described it as “not morally correct” to provide financial assistance to companies that not only did not suffer from higher gas prices but in fact benefited from them, Bloomberg said yesterday “All I’m saying is, let’s look at that again,” Habeck said in a speech cited by Die Welt, following calls for rethinking the handouts and windfall profit taxes for gas utilities.
Germany’s finance minister ruled out a windfall profit tax.
“However, there is a relatively high hurdle,” Habeck also said.
“If we start to play games and that brings lawsuits – and there will definitely be lawsuits in one direction or another – and the levy is scrapped, then we will still have the same problem: some companies and citizens will experience a collapse in gas supply.”
The agency said in the report that the issue highlights the difficult environment the German government has to navigate as gas and electricity prices keep breaking record after record and supply remains constrained.
It is believed that the gas levy on consumers is part of plans to deal with this situation as a failure of one of the large gas utilities in Germany could have a ripple effect on the whole economy.
This levy that is scheduled to take effect in October was set at 0.024 euros per kilowatt-hour, to expire at the end of March 2024.
Since its announcement, a dozen utilities have filed applications for financial aid to the tune of 34 billion euros, equivalent to almost the same amount in dollars.
“We will see if we can find a legally secure way of stopping these companies making improper use” of the handout program.