The measure would cost the state budget around 23 million euros.

"The current reduced 9 percent VAT rate would be covered from the state budget and reduced to zero for households," she told a news conference. "This means that households will pay no VAT on district heating this heating season."

She said the zero rate could be in effect from January 1 to the end of the heating season in late April.

Currently, a reduced VAT rate of 9 percent applies to district heating.

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