The Italian Cabinet has approved a decree temporarily halving the 10 percent VAT on purchases of natural gas and allowing tax credits for businesses that have experienced sharply higher electricity and natural gas prices.

The Council of Ministers said in a 28 March release that the measures are part of an estimated €4.9 billion package that will provide relief from inflation and additional financial aid to regional governments to deal with healthcare expenses.

Companies whose gas and electricity bills in the first quarter of 2023 rose 30 percent or more from the same period in 2019 will be allowed tax credits under the decree. The lower VAT on natural gas purchases and the business tax credits for higher energy costs will be in effect from 1 April through 30 June.

Discounts on electricity and gas bills for households with incomes of up to €15,000 will also be extended until 30 June, the government said.