Germany to lower tax on gas

Chancellor Olaf Scholz said on Thursday that Germany would temporarily slash the sales tax on gas to help consumers facing soaring bills amid a crunch in Russian energy supplies.

Scholz said the move to cut the VAT on gas to seven percent from 19 percent currently was intended to offset an energy surcharge in the wake of the Ukraine war expected to cost households hundreds of euros.

"The discounted sales tax will apply as long as the gas surcharge is being applied, that is until March 31, 2024," he told reporters.

"With this measure we are offering gas customers relief that is significantly larger than the extra burden imposed by the surcharges."