ZAGREB, 16 Feb 2022 - The Croatian government on Wednesday launched an HRK 4.8 billion (€640 million) package of measures aimed at shielding consumers from rising energy prices.
The package includes the capping of the growth of electricity prices to 9.6% and the growth in prices of gas to 20%.
Furthermore, the Value Added Tax (VAT) rate on gas supplies and some agricultural products will be lowered.
The package also provides a rebate on domestic energy bills.
Unveiling the set of measures, Prime Minister Andrej Plenković said today that the package had been prepared in a systematic manner, and is "timely and all-encompassing".
The package contains the measures targeting households, businesses and agricultural producers, Plenković said adding that the state-run Croatian power provider HEP will also bear a part of the burden to address the rising electricity prices.
The measures encompass tax reduction, subsidies for citizens at risk of energy poverty, and one-off discounts on energy bills for pension recipients, while businesses, farms and fisheries will be entitled to subsidies to cope with the rising energy costs.
Cap for electricity paid to make HRK 460 million disposable to households
The caps on the rise in prices of electricity will make HRK 460 million disposable to households.
The subsidies for households using gas will include HRK 0.10 per kilowatt-hour.
The support will be provided to micro businesses and SMEs with the average annual consumption of gas up to 10 gigawatt-hour, and the discount will be HRK 0.15 per kWh.
The VAT rate on gas and heating energy will be lowered from 25% to 13%, the same VAT already applied on power. The lower VAT is a permanent measure.
VAT will additionally be reduced to 5% on gas as a temporary measure, in place from 1 April 2022 to 31 March 2023.
VAT to be reduced on some food in bid to tackle rising cost of living for households
The VAT rates of 13% will be reduced to 5% for fresh meat, fish, eggs, fruits, vegetables, cooking oils, and baby food and the the standard 25% VAT rate will be slashed to 5% on some items in the agricultural production (fertilisers, plants etc.).
The package aimed at tackling rising costs of living also includes the reduction of the 25% VAT to 13% on feminine hygiene products, such as tampons and sanitary towels.
The coupons for electricity bills for senior citizens at risk of poverty will increase from 200 to 400 kuna a month and will now also be applicable to gas bills.
Pensioners whose monthly income is up to HRK 4,000 will be also entitled to payments between HRK 400 and 1,200 under the the energy support scheme.
(€1 = HRK 7.523717)
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