Liechtenstein Readies Energy Tax Rise
05 July 2013
Posted by: Author: Ulrika Lomas
Author: Ulrika Lomas
The Liechtenstein Government has increased the tax imposed on electricity consumption, provided for within the framework of the country's Energy Efficiency Decree (Energieeffizienzverordnung) dating from May 27, 2008.
The levy is designed to promote energy efficiency and renewable energy in the Principality. The proceeds of the tax flow to a feed-in tariff fund, used to secure feed-in tariffs for the next ten years for natural and biogas power plants and for photovoltaic installations. Under the plans, the levy will rise from 0.2 cents per kilowatt-hour (kWh) currently to 0.3 cents per kWh from August 1, 2013.
Defending its decision to increase the levy, the Government explains that the feed-in tariff fund is forecast to have a negative balance of around CHF35m (USD36.8m) in 2023, if no tax rate adjustments are made.
As a first step, the Government intends to utilize Article 18 of the country's Energy Efficiency Law (Energieeffizienzgesetz), stipulating that the tax can only be increased to a maximum of 0.3 cents per kWh. As an interim measure, the Government will therefore amend Article 16 of the Energy Efficiency Decree and fix the levy at the 0.3 cents per kWh limit from August 1. The measure is expected to generate additional revenues over the course of a year of approximately CHF400,000.
Given that this revenue will not suffice to return the fund to balance, the Government intends to amend the Energy Efficiency Law to allow further increases to be implemented. Such modifications to the Law will take around one year to complete.
Concluding, the Government insists that the increase will not affect end consumers in Liechtenstein, as greater net price reductions will more than offset the measure.