Heating costs are low, but there is a threat of a VAT increase - financial expert explains the effects.

Heating costs are low, but there is a threat of a VAT increase - financial expert explains the effects.

According to a report by www.n-tv.de,

The article reports that heating costs have fallen significantly compared to the previous year and consumers can currently receive comparatively cheap gas tariffs. Despite the positive development, there is also negative news: VAT on gas is to be raised again to 19 percent from March 2024.

According to the comparison portal Check24, gas and heating oil prices have fallen significantly compared to the previous year. The average price of heating oil has fallen by 19 percent, while gas costs are an average of 25 percent lower. Furthermore, millions of households can expect falling gas costs in the new year, as almost half of all basic suppliers will reduce prices. However, the price brake for gas will expire on January 1, 2024, which means that gas prices for consumers should only rise slightly on average.

However, the upcoming increase in VAT on gas is causing concerns among consumers. The cost of 20,000 kWh of gas would increase by nine percent if VAT was increased from seven percent to 19 percent.

As a financial expert, we can analyze that the falling heating costs initially lead to positive financial relief for consumers. This could lead to an increase in disposable income, which in turn could have positive effects on consumption and the economy. However, the planned additional costs due to the VAT increase could lead to a burden for consumers and worsen their financial situation.

Overall, the planned VAT increase on gas could increase spending for many households and lead to reduced purchasing power. It is therefore advisable for consumers to adjust their household budgets and perhaps look for alternative ways to save.