February 16 (SeeNews) - Croatia's government has prepared a set of price caps, VAT cuts and subsidies to help households, companies and farmers tackle soaring energy prices - a package worth an estimated 4.8 billion kuna ($726 million/637 million euro), prime minister Andrej Plenkovic said on Wednesday.
The rise in electricity prices for households will be limited to 9.6% above their current levels and the growth of natural gas prices will be capped at 20%, Plenkovic told the media, according to a video file posted on the website of public TV broadcaster HRT.
Electricity prices for households in Croatia have not changed since January 2019.
State-owned power supplier Hrvatska Elektroprivreda (HEP) will also bear part of the burden of rising electricity prices on consumers, Plenkovic said, adding that the support measures will take effect as of April 1.
Value added tax (VAT) on the sales of heating energy will be cut permanently to 13% from 25% and will thus become equal to the VAT rate on electricity. VAT on natural gas, currently standing at 25%, will be slashed to 5% from April 1, 2022 to March 31, 2023, before rising to 13% afterwards.
The VAT rate of 13% will be cut to 5% for fresh meat, fish, eggs, fruits, vegetables, cooking oil, baby food, seeds and fertilisers.
The support package also includes financial aid to pensioners and energy-poor households, as well as subsidies for gas costs for small and medium-sized companies.
Croatia's average annual consumer price inflation accelerated to 2.6% last year from 0.1% in 2020, the national statistical office said last month. In December alone, inflation quickened to 5.5% on the year, after increasing by 4.8% in November.
(1 euro = 7.529 Croatian kuna)
Hrvatska Elektroprivreda d.d. is among the biggest companies in SEE. You can download our SEE Top 100 ranking
here or subscribe to our free Top 100 newsletter
here