TAX on electricity bills will be cut in Spain this weekend- the second time in less than a year.

Prime Minister, Pedro Sanchez, announced in Congress on Wednesday that VAT will be slashed from 10% to 5% as part of a royal decree to deal with the consequence of the war in Ukraine.

The government cut the VAT rate from 21% to 10% last October as wholesale electricity prices shot up to what were then record levels.

Pedro Sanchez said: “With this measure we are going to protect the families of our country.”

Just two months ago, the leader of the opposition Partido Popular, Alberto Nuñez Feijoo proposed a 5% reduction but the government rejected it, with Ecological Transition Minister, Teresa Ribera, describing it as a ‘cosmetic measure’.

The VAT cut to 5% is the lowest permitted under EU law.

With a general election looming in December and a disastrous performance by Sanchez’s PSOE in Sunday’s Andalucia regional elections, the new tax cut might be seen as some ‘red meat’ for voters.

The Prime Minister also told Congress that the government is working on the implementation of the gas price cap of €40 and introducing measures ‘to cushion and protect’ families.

As petrol pump prices continue to rise, EU rules prohibit the reduction of VAT rates.

The government introduced a 20 cents per litre subsidy in April, with haulage firms now calling for that figure to be doubled as prices reach €2 per litre in many parts of Spain.

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