Denmark to reduce electricity tax in 2022 and 2023
A majority in the Danish parliament has agreed to reduce the amount of tax charged on electricity, beginning this year.
The deal was presented on Friday in the form of a political agreement between enough parties to vote it through parliament.
The reduced electricity tax, which will be temporary, is expected to cost the Danish state 475 million kroner and is part of a wider deal which aims to compensate the public for increasing living costs.
Tax on electricity will be eased by 4 øre per kilowatt hour for the last three months of 2022 (1 øre is one hundredth of a krone), and by 4.3 øre per kilowatt hour in 2023.
As such, the electricity tax rate will be 72.3 øre per kilowatt hour for the last quarter of 2022, and 68.8 øre per kilowatt hour throughout 2023.
Electricity taxes were already scheduled for reduction under the terms of a 2018 political agreement.
Prior to Friday's agreement, the plan was for electricity tax to fall from 76.3 øre per kilowatt hour in 2022 to 63.9 øre per kilowatt hour in 2025.
The temporary cuts announced on Friday are separate from that deal and mean that the tax will be lower than planned in 2023, but will rise at the beginning of 2024.
Friday’s agreement also includes provisions to increase tax subsidies for people in employment and to give a one-off lump sum of 5,000 kroner to elderly people who receive the ældrecheck welfare benefit.
The overall cost to the state of the deal is 3.1 billion kroner.
Parties from both sides of the political aisle have pledged to back the agreement in parliament. They include the Socialist People’s Party (SF), the Red Green Alliance, Social Liberals (Radikale Venstre), Conservative and Liberal parties along with the Social Democratic government.
The increasing cost of energy is cited in the agreement as the primary reason for the necessity of the deal.
The Danish Chamber of Commerce praised the political agreement in comments to news wire Ritzau.
“A reduced electricity tax means both consumers and businesses get an incentive to switch to green electricity,” the interest organisation’s director Brian Mikkelsen said.
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The deal was presented on Friday in the form of a political agreement between enough parties to vote it through parliament.
The reduced electricity tax, which will be temporary, is expected to cost the Danish state 475 million kroner and is part of a wider deal which aims to compensate the public for increasing living costs.
Tax on electricity will be eased by 4 øre per kilowatt hour for the last three months of 2022 (1 øre is one hundredth of a krone), and by 4.3 øre per kilowatt hour in 2023.
As such, the electricity tax rate will be 72.3 øre per kilowatt hour for the last quarter of 2022, and 68.8 øre per kilowatt hour throughout 2023.
Electricity taxes were already scheduled for reduction under the terms of a 2018 political agreement.
Prior to Friday's agreement, the plan was for electricity tax to fall from 76.3 øre per kilowatt hour in 2022 to 63.9 øre per kilowatt hour in 2025.
The temporary cuts announced on Friday are separate from that deal and mean that the tax will be lower than planned in 2023, but will rise at the beginning of 2024.
Friday’s agreement also includes provisions to increase tax subsidies for people in employment and to give a one-off lump sum of 5,000 kroner to elderly people who receive the ældrecheck welfare benefit.
The overall cost to the state of the deal is 3.1 billion kroner.
Parties from both sides of the political aisle have pledged to back the agreement in parliament. They include the Socialist People’s Party (SF), the Red Green Alliance, Social Liberals (Radikale Venstre), Conservative and Liberal parties along with the Social Democratic government.
The increasing cost of energy is cited in the agreement as the primary reason for the necessity of the deal.
The Danish Chamber of Commerce praised the political agreement in comments to news wire Ritzau.
“A reduced electricity tax means both consumers and businesses get an incentive to switch to green electricity,” the interest organisation’s director Brian Mikkelsen said.
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