According to the federal government’s wishes, VAT on gas should rise again to the regular rate from January. According to information from the German Press Agency, the cabinet approved corresponding plans from Finance Minister Christian Lindner (FDP) on Wednesday. However, they still have to be decided by the Bundestag.

Because of the high energy prices after the Russian attack on Ukraine, the federal government temporarily reduced the VAT rate from 19 to 7 percent, thereby making gas cheaper. This special regulation is now set to expire three months earlier than planned at the turn of the year. As a result, experts expect gas prices to rise again in the middle of the heating season.

The Finance Ministry said the reduction was only ever planned as a short-term relief. Prices have recently fallen faster than expected and the energy market has calmed down. As “insurance” in the event of an unexpected price increase, the federal government plans to extend the energy price brakes until spring.

For the state coffers, the earlier return to the higher tax rate should mean around 2.1 billion euros more tax revenue.