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Politics Spain slashes fuel and energy taxes in €5 billion plan to curb Iran war impactPM Pedro Sánchez insists Spain is "better prepared" than in 2022, as the cabinet also passes new regulations on housing
Madrid
Friday, 20 March 2026, 14:39
The Spanish cabinet approved on Friday the legal measures to alleviate the economic impact of the war in the Middle East.
The cornerstone of the plan is a significant fiscal intervention aimed at cooling inflation. Key measures include:
VAT (IVA) Reductions: The tax on fuels, electricity, and gas will be cut to 10% (down from 21%)
Energy Price Containment: Strategies to prevent a "domino effect" where rising energy costs trigger a general spike in the price of consumer goods.
Targeted Aid: Support lines for sectors most vulnerable to transport and production cost increases.
During his speech at the Moncloa palace, just three weeks after Israel and the US started bombing Iran, PM Pedro Sánchez said that Spain is better prepared now than at the start of the war in Ukraine in 2022.
The plan costs five billion euros and includes 80 lines of actions, among them the reduction of IVA tax on fuels, electricity and gas to ten per cent.
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