Congress validates the third anti-crisis decree of the Government: these are the main measures

Congress has given the green light to the third royal decree-law to deal with the energy crisis and the high inflation aggravated by the Russian invasion of Ukraine, with an impact of 10,000 million euros. The initiative approved by the Council of Ministers on December 27 has been validated this Tuesday with the support of a large parliamentary majority: 175 votes in favor, seven against and 164 abstentions, including those of the PP, Vox and Ciudadanos. ERC has also abstained, unlike the rest of the government partners (PNV, EH Bildu, Más País or Compromís, among others), who have voted in favor.

The third package of measures in this regard extends the bulk of the initiatives adopted in March and June through the other two legislative texts and adds new ones. It should also be noted that the decree-law entered into force on January 1.

VAT reduction on food

One of the main innovations is the elimination of VAT on basic foodstuffs (it goes from 4% to 0%), such as bread, bread-making flour, milk, cheese, eggs, as well as fruits, vegetables, vegetables, legumes, potatoes and cereals. On the other hand, VAT was lowered from 10% to 5% for oils and pasta.

This tax cut will mean savings for families of 661 million euros and will be maintained until June 30 or until underlying inflation drops below 5.5%. If it falls below that rate, the usual VAT tax rate will be recovered on the aforementioned food.

Help of 200 euros to vulnerable families

The decree-law also establishes a check for 200 euros, which is articulated
through a single payment and seeks to “reduce situations of vulnerability
income” that are not covered by other benefits of a social nature.
Salaried, self-employed and unemployed will be able to access this subscription.

The requirements are that your income is less than 27,000 euros and your
equity does not exceed 75,000 euros as of December 31, 2022. This measure,
which may be requested from February 15, 2023, will benefit more than 4.2
million homes and 6 million people. Savings for families with
This aid will amount to 1,200 million euros, according to the Government.

Subsidy for public transport

Likewise, the Government has maintained a 30% subsidy for urban and interurban transport managed by city councils and communities (the metro or municipal buses) on the condition that the rest of the administrations involved, regional and local, commit to putting a 20 additional % that was previously voluntary.

Along with this measure, the free Cercanías, Rodalies and Media Distancia conventional routes and state-owned bus lines for regular travelers have been extended, as well as 50% discounts on Avant passes, during 2023. The royal decree -law extends the free multi-trip passes and tickets to state-owned bus lines.

Limit of 2% to the annual update of the rent

The validated text also extends until December 31 the 2% limit to the annual rent update and the suspension of evictions and releases in vulnerable homes without a housing alternative. Along with this, an extraordinary extension of six months is enabled, at the request of the lessee, of the validity of the lease contracts that end before June 30, 2023.

During those six months, the terms and conditions established for the current contract will continue to apply. The landlord must accept the extension request unless other terms or conditions have been established by agreement between the parties or that the landlord has communicated in a timely manner that he needs the home to use it as permanent housing for himself or his family members.

Fuel discount for those most affected

The Government withdrew the aid of 20 cents per liter of gasoline, but this discount will be extended for professional road transport, which will be paid at the end of each month. In this sense, the
current bonus for the sector and sets a reduction of 10 cents of euros per
liter during the second quarter of 2023.

Also, subsidies worth 300 million euros are enabled to mitigate the increase in the price of fertilizers. Up to 300,000 farmers may benefit from direct aid, which will be granted per hectare, up to a maximum of 300, and will be 22 euros per hectare in the case of rainfed land and 55 euros for irrigated land. To these are added another 240 million to alleviate the rise in the price of agricultural diesel and 120 million to mitigate the increase in fishing fuel.

Tax reductions for electricity and gas are maintained

The Government extended the tax reductions in the receipt of electricity and gas. In this way, the VAT rate of 5% for certain electrical energy supplies is maintained, as well as the suspension of the 7% tax on electricity generation, and the reduced tax rate of 0.5% – the minimum that allows the EU– of the Special Tax on Electricity. This tax reduction will continue to reduce the bill of 27.7 million households, the self-employed and companies, according to estimates from Moncloa.

With regard to gas, a VAT rate of 5% continues to be applied to all components of the invoice. This extended to briquettes, pellets,
from biomass or wood for firewood used as fuel
in heating systems. With this new extension, and from the beginning of
the energy price crisis in 2021, the Government has applied reductions in
taxes in this area for a value of 16,398 million euros.

In addition, the prohibition on cutting off basic electricity, water and gas supplies to vulnerable consumers in the event of non-payment is maintained until December 31, 2023, while the discount on the electricity bill is extended for this group through of the social bond. On the other hand, the maximum sale price of the butane cylinder will continue to be limited to 19.55 euros.

Aid to the gas-intensive industry

The Government launched a new package of 950 million euros
for the gas intensive industry. On the one hand, with a new ICO liquidity line of 500 million euros, to which 450 million euros are added in
aid for the ceramics industry and other subsectors. Together with the decree-law,
The Government has also approved the Strategic Project for the Recovery
and Economic Transformation (PERTE) of industrial decarbonization, with a
public investment of 3,100 million euros.

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