(Bloomberg) -- Germany is planning to restore a 19% sales tax on gas and heat deliveries from the end of this year, ending the current discount rate three months earlier than planned.
Chancellor Olaf Scholz’s ruling coalition cut the rate to 7% from Oct. 1 of last year, in an effort to ease the burden on citizens hit by a surge in energy costs triggered by Russia’s invasion of Ukraine.
The government decided to end the discount early because prices have returned to a “normal level” more rapidly than expected, Scholz’s deputy spokesman, Wolfgang Buechner, said Monday at the regular government news conference in Berlin. It’s in the process of drawing up the legislation needed to enact the change, he added.
Oliver Olpen, a spokesman for the finance ministry, said the restoration of the higher rate would lead to an increase in public-sector tax revenue of €2.1 billion ($2.2 billion). He cautioned that this is a forecast contained in the government’s budget planning and the number could change.
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