The Belgian federal government is expected to raise €712m by 2018 from 'tax shift' measures which include this month's change in the VAT rate for the supply of domestic electricity.

On 23 August 2015 the Belgian government decided to increase the VAT rate on domestic supply of electricity. As of 1 September 2015, the supply of electricity to residential consumers has been subject to the standard VAT rate of 21%, instead of the reduced VAT rate of 6%.

This is a step back from the decision of the previous administration, which introduced the reduced rate on 1 April 2014 to reduce the tax burden on the final consumers.

It was meant for families and private households, but was abused by bigger players and companies. The government's intention is to stop this practice, however, this will inevitably add an additional €256 on a family's annual energy bill (according to consumer group Test-Aankoop).

The move has been highly criticised with even an online petition started against the changes, however clearly it has not prevented the increase from going ahead.

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