Lithuanian cabinet approves zero VAT on heating

VILNIUS – The Lithuanian government decided on Wednesday to temporarily apply a zero VAT rate to district heating for households.

Prime Minister Ingrida Simonyte said the parliament would be asked to debate and vote on the proposed amendment under a fast-track procedure. 

Finance Minister Gintare Skaiste said zero VAT would help mitigate a surge in households' heating bills and would cost the state budget 23 million euros. 

She said there were no plans to cut the VAT rate for heating to businesses.  

District heating to households is now subject to a reduced VAT rate of 9 percent.

If the parliament passes the amendment, the zero VAT rate will be in effect from January 1 to the end of the heating season in late April. 

According to Simonyte, the government last autumn took measures to mitigate the impact of soaring natural gas and electricity prices on households, but the situation with heating is more complicated.