The value added tax is a percentage tax. It increases in kroner and øre in line with the price. The state has its fixed expenses which must be balanced by income. But the state has never had greater income from energy than now, where the main income comes from the export of oil and gas. The power we export means very little in the large European market, as Spetalen, among others, has pointed out. It is therefore necessary to get control over exports, as well as get a much better filling rate in southern Norway. This is important both to safeguard energy security and to reduce the price of electricity for consumers. Until this is done, we must at least sharply cut the VAT on electricity. It will help households who are currently struggling, as well as cottage owners who will not receive any compensation for the political blunder of relinquishing control over exports. Certain types of businesses also do not have VAT deductions, so such a measure will also help these. Germany has recently helped its citizens by cutting the VAT on gas from 19 to 7 percent. They use a lot of gas for heating, so this is equivalent to a cut in VAT on electricity for us. Spain has cut the VAT on electricity from 21 per cent to 10 per cent already last year and further to just 5 per cent this year. No one can better afford to cut VAT than the Norwegian state. If the government and the Storting do not do this immediately, that is the will. Cuts in VAT should be one of the topics addressed in the upcoming emergency meeting on electricity at the Storting. VAT should then be cut or removed. It can always be reintroduced when the politicians show that they have gained control over the situation, i.e. electricity prices for the good of the public. In Northern Norway, there is no VAT on electricity. At the same time, the electricity prices there are only a few cents. It does not make sense that people in southern Norway are now being punished extra harshly. Remove the VAT on electricity throughout the country until we have gained political control over the crisis. This is in addition to other forms of support schemes in southern Norway, not instead. A number of social economists will now probably howl in unison that cutting VAT can increase the consumption of electricity and thus increase the risk of rationing. However, there are many indications that consumption is not very elastic. Heavy industry often has long contracts for electricity at very favorable prices, and gets the VAT back anyway. Their consumption will therefore be completely unaffected by cuts in VAT on electricity. Households need some heat for minimum well-being. You also have to wash clothes, and perhaps shower a few times a week as well as cook some food. Most households choose to cut back on other things before cutting further on electricity consumption. The elasticity of consumption in relation to price is therefore very low. There is therefore hardly a good argument for not cutting the VAT on electricity. The main reason for the danger of an upcoming rationing is that the government did not take the signals about the danger of low water in the reservoirs seriously. Several power analysts already warned in the autumn of 2021 that if electricity exports from southern Norway were to continue, water reservoir levels in southern Norway would become critically low. That is, as the situation is today. In February this year, I was dismayed by the government’s indolence and wrote a call myself to get control over exports, but it fell on deaf ears. The inertia of the government will now probably result in very high electricity prices for the winter. Even the part of 10 per cent for which you will not receive compensation can cause the total bill to be very large. On top of this, we have the risk of rationing, which in turn leads to the risk of death and corruption as well as enormous financial losses. As a minimum additional compensation: cut the VAT on electricity now.
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Cut the VAT on electricity – Statement
