President Andrzej Duda signed on Wednesday two bills – on the protection of gas fuel consumers in connection with the situation on the gas market and an act reducing VAT, among others for food, fertilizers and gas – the Chancellery of the President of the Republic of Poland announced on Wednesday. As mentioned, it is part of the so-called 2.0 anti-inflationary shield.
As the Law Firm recalled, the main objective of the act on the protection of gas fuel consumers is to launch special instruments increasing Poland’s energy security and, in the short term, supporting households, residents of multi-unit buildings and some vulnerable customers.
The act on special solutions for the protection of gas fuel consumers assumes that gas tariffs approved by the President of the Energy Regulatory Office – apart from households currently using them – will also be available to other named recipients.
These are to be: – entities providing healthcare services, – organizational units of social assistance, – night shelters and heating rooms, – organizational units supporting the family and foster care system, – entities of the education system, universities and institutions conducting teaching and research activities, – entities running nurseries and kindergartens, – churches and other religious associations, – entities conducting cultural and archival activities, – as well as voluntary fire brigades and social cooperatives in the scope of their basic activities.
The tariff protection will also be available to institutions other than universities, which form the system of higher education and science and carry out tasks consisting in teaching and research activities.
Housing associations and cooperatives will automatically be included in the tariffs. Managers are to submit declarations in which they declare how much of the gas they buy is used for purposes other than housing. This part will be excluded from tariffing.
Gas fuel prices freeze
The act excludes the possibility of increasing gas prices and tariff rates in 2022. It anticipates that the prices of gaseous fuels will be frozen at the level of the prices included in the tariff, the so-called ex officio sellers, set for the period from 1 January to 31 December 2022.
This price is a maximum price, which means that customers who previously concluded a contract with a supplier providing for a lower price, the lower price is applied until the expiry of the contract. Gas sellers who fail to comply with the obligation to apply the frozen prices and rates will be subject to a fine of not less than PLN 1 million and not more than 15 percent of revenue.
At the same time, the act provides that gas sellers to customers covered by tariffs will be entitled to compensation – the difference between the actual purchase price and the selling price according to the tariff. In the case of an ex officio seller, the compensation is the difference between the list prices as of January 1, 2022 and his tariff.
The Act shall enter into force on the day following its promulgation.
The president signed a law reducing VAT
On the same day, President Duda also signed a law reducing VAT from February 1 to July 31, among others for food, fertilizers and gas. As recalled by the president’s office, its aim is to introduce a temporary reduction in VAT rates on certain goods as an element of counteracting inflation. Therefore, it introduces changes to the Act of March 11, 2004 on tax on goods and services, consisting in lowering the rates of tax on goods and services in the period from February 1, 2022 to July 31, 2022. According to the act, VAT on food and beverages currently subject to a 5 percent rate is to drop to zero. The tax rate for motor fuels: diesel oil, biocomponents constituting intrinsic fuels, gasoline, LPG is to drop from 23 percent to 8 percent. For fertilizers, pesticides, horticultural soil and other means of supporting agricultural production, VAT is expected to drop from 8 percent to zero. The VAT for gas is cut from 8 percent to zero, for heat from 8 percent to 5 percent, and for electricity the reduced tax rate of 5 percent will be maintained. The total decrease in state budget revenues was estimated at about PLN 11.6 billion, of which the reduction of VAT on food and beverages is to translate into a decrease by about PLN 2.92 billion, in the case of fuels it is to amount to about PLN 3.11 billion, a decrease VAT on fertilizers has a negative effect on the budget at the level of PLN 0.52 billion, on gas – around PLN 2.09 billion, on electricity – around PLN 2.30 billion, and on heat – around PLN 0.67 billion.
The act comes into force on February 1, 2022.
Main photo source: PAP / Andrzej Lange