A new package of measures to help citizens and companies has been adopted following the rise in energy prices. The package is worth HRK 4.8 billion and will be implemented from April 1, 2022.
The package of measures will limit the growth of electricity prices to 9.6%, while the growth of gas prices will be limited to a maximum of 20%. In addition to limiting the growth of energy prices, the measures include reduced VAT rates on gas and selected agricultural products. The package also includes subsidies on the price of gas for households, one-time benefits for retirees, changes in the system of benefits for the socially disadvantaged, and more. Read a detailed package of measures to mitigate rising prices due to rising energy prices.
Reduction of VAT on gas and thermal energy
VAT on gas and thermal energy is reduced from 25% to 13%. This means that VAT on electricity, gas and thermal energy will be equalized. From 1 April 2022 to 31 March 2023, the VAT rate on gas supplies is reduced from 25% to 5%. VAT on briquettes, wood chips, and firewood is also reduced from 25% to 13%.
A package of measures to help entrepreneurs, farmers, and fishermen
Entrepreneurs will receive subsidies for the cost of gas from April 1, all customers will be able to mitigate the increase in electricity prices (HEP), and farmers and fishermen will receive a low-value aid program for the purchase of fertilizers.
Despite the strong global rise in prices, limiting the increase in electricity bills will relieve households of around HRK 460 million. This will significantly mitigate the growth of electricity prices in Croatia.
Support for the cost of gas to entrepreneurs refers to micro, small and medium-sized enterprises with an average annual consumption of up to 10 GWh. The amount of support is 15 lipa / kWh, or about 22% of the projected price of 89 EUR / MWh. Entrepreneurs will be able to receive aid with a voucher for the amount of small value aid. Entrepreneurs will apply for support through the HAMAG-BICRO application, which generates a Grant Decision and a voucher for the total amount of support estimated based on individual reference annual consumption. Each month, the subsidized amount will be deducted from the voucher for entrepreneurs until they spend it, or until the end of March 2023. The total amount of this measure is HRK 600 million.
The low-value aid scheme for farmers includes the purchase of fertilizers; field crops, vegetables, and permanent crops. The support covers 88 thousand agricultural holdings, and the estimated amount of the measure is HRK 200 million. Aid amounts to 450 HRK/ha of agricultural land for the first 10 ha and 250 HRK/ha for the next 10 ha to a total of the first 20 ha.
Reduction of VAT on food and daily necessities
The package of measures to mitigate the growth of prices due to higher energy prices also includes changes related to the reduction of VAT rates on food and daily necessities, namely:
- on fresh meat and fish, eggs, fruits, vegetables, edible oils and fats, baby food, agricultural costs, seedlings, fertilizers, and pesticides – from 13% to 5%;
- for butter and margarine – from 25% to 5%;
- tickets for sports, cultural and other events – from 25% and 13% to 5%.
