The Lithuanian government is planning to propose to temporarily cut the value added tax (VAT) on central heating to zero. The move is aimed at mitigating the effects of soaring energy prices for households, Finance Minister Gintarė Skaistė said.
The measure is estimated to cost the government around 23 million euros.
Read more: Vilnius residents receive ‘cosmic’ heating bills amid soaring energy prices
“This means that households will pay no VAT on district heating this heating season,” Skaistė told reporters on Tuesday.
The zero rate would be in effect from January 1 until the end of the heating season in late April.
Currently, central heating is subject to 9-percent VAT rate.
Skaistė noted that the tax cut would complement other measures aimed at mitigating the effects of inflation on households. Low-income families can apply for heating subsidies, while households that use gas for heating are able to distribute the costs over a 5-year period.
According to Skaistė, heating cost hikes were uneven across the country and depended on the sources that each city uses for heating. Vilnius, which has a large share of natural gas in its energy mix, has been among the worst-affected.
Read more: More people in Lithuania made eligible for heating subsidies
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