The reduced tax rate of 9.5% will apply for the heating season, from September 1 to May 31 next year.
The government proposes to reduce VAT on supplies of electricity, natural gas, firewood, and district heating.
The lower VAT on electricity and natural gas adds to the measures already taken to regulate the prices of these energy products, but when it comes to firewood and district heating, the reduced VAT rate is the first such measure the government is taking to mitigate price hikes, Boštjančič said.
The lower VAT will result in a roughly EUR 130 million (USD 132.9 million) shortfall in the state budget, some EUR 40 million less this year and EUR 90 million less next year.
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