Ministers for Finance of the European Union agreed on 7 December amending EU rules to reduce value added tax on goods and services related to the fight against climate change, health protection and the transition to a digital economy. At the same time, they agreed to phase out some of the current lower VAT rates on fossil fuels and other goods that increase greenhouse gas emissions by 2030, so that the 27-nation bloc achieves its goal of not emitting net emissions by 2050. CO2.
Changing tax rules is usually a slow process in the European Union, as EU legislation on tax matters requires the unanimous consent of all Member States, so every government has a potential veto. Now, however, the directive has been quickly adopted by finance ministers, as the EU’s general minimum VAT rate for all goods and services remains at 15 per cent (except for the list of exemptions, where the reduced VAT rate must be at least 5 per cent).
The agreement of the finance ministers does not completely abolish this system. Member States may continue to maintain their special VAT rates provided that they do not jeopardize the objectives of the European Green Agreement. It is important, however, that products related to the fight against climate change, such as bicycles, environmentally friendly heating systems and solar panels installed in private homes and public buildings, will also be able to benefit from a lower VAT rate.
But the agreement will also allow governments to apply lower VAT rates to products and services that make the economy more suited to the digital age, such as internet access and live coverage of cultural and sporting events. As with health protective equipment such as face masks and other medical equipment, as well as products that are considered essential for people with disabilities, the tax can be reduced.
For the time being, the agreement of the EU finance ministers only fixes the framework, the European Parliament can decide on the system in 2022, which must then be supported by the European Commission and the European Council. On the merits, the matter could turn to realization in March.
Hungarians also support the VAT reduction
It has already been suggested in previous EP debates that VAT on goods and services related to the fight against climate change, health protection and the transition to a digital economy could be reduced. Also, the current proposal does not include it, but some MEPs say organic and other environmentally friendly food and non-packaging products should be sold at reduced VAT.
A Pulse Researcher According to a joint research by Napi.hu, which is representative of the adult Hungarian population, the majority of Hungarians can already support the current agreement of the Minister of Finance: 52 percent agree with the current round of VAT reductions, while 35 percent would extend it to other products. However, 10 percent of the population said it would not be an effective tool because traders would devour the VAT rebate to increase their profit margins. However, 3 percent of the Hungarian adult population still does not believe in climate change.
There is no really big division between Hungarian women and men: in the former group, only 50 percent would support the current draft, while 12 percent say it is only a step in favor of traders. Men are more optimistic: 55 per cent would be behind the current proposal and only 8 per cent believe a VAT cut would be built into prices.
There are already more marked differences between the different age groups. Firstly, the proportion of retirees who say there is no climate change is twice as high (4%), and 40% of young people would give a VAT reduction to organic and other environmentally friendly products, compared to 35% of middle-aged people and 32% of older people. In comparison, the support of the basic proposal is 50-53 percent for each generation.
Based on educational attainment, it appears that 4 percent of those with a bachelor’s degree do not believe in climate change, while graduates have virtually no such Hungarian adults. University graduates are the most supportive of the current proposal (57 per cent), while those with a secondary education are the most likely to see a reduction in VAT in prices (11 per cent) and a reduction in the tax rate on other products (37 per cent).
Examining the Hungarian electorate by place of residence, it appears that the villagers are the most in favor (61 per cent) and the Budapest and city dwellers the least (48-48 per cent) in favor of reducing the VAT on the range of products and services proposed by the finance ministers. However, the latter two groups would extend the reduction to VAT on organic and other environmentally friendly food and non-packaging products. Most of the people in Budapest are the ones who neglect climate change: 4 percent.
This is what you need to know about research
The Pulse Researcher surveyed 1,000 people, and the answers represent the opinion of the Hungarian adult population. This means that the data, according to gender, age, education and type of settlement, reflect the opinion of the adult population of 18 plus according to the Hungarian population.
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Source: Napi.hu by www.napi.hu.
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