Help For Shoppers As Spanish Government Scraps VAT On Food Staples
Spain News
Published: 28 December 2022 15:03 CET
The Spanish Government announced on Tuesday, December 27, that from January 1, it would be scrapping VAT on basic foods such as milk, bread, eggs, cheese, cereals, bread-making flour and fruit and vegetables, in order to help those struggling with soaring inflation and runaway food and energy prices.
Prime Minister, Pedro Sánchez, made the announcement during his end-of-year speech stating that “For six months, we will reduce VAT on all basic foods from 4.0 percent to 0.0 percent.”
He said that the government would also be cutting the VAT on pasta and cooking oil from 10% to 5%. Meat and fish products, however, have been excluded from the tax reductions, as have yoghurt, preserves, coffee, and bottled water.
The aim he said is "to protect the middle and working classes given the rise in the cost of living, energy, and food."
Another product that has been left off of the VAT reduction list is sugar, which has this year seen a price increase of 50%. Sugar along with sugary and alcoholic drinks and juices will continue with their usual VAT rate of 21 percent, as will personal hygiene and cleaning products.
The new measure which also includes extending rent and eviction controls will cost 10 billion euros, bringing the cost of aid packages that have been put in place since February, to approximately 45 billion euros.
The Prime Minister also unveiled a one-off payment of 200 euros that will be available to
“families with incomes lower than 27,000 euros.”
Although this new aid package is good news, Mr Sánchez also spoke about the 20-cent discount per litre of fuel, which has been available for all consumers. He said that from January 1, this will be limited to “the most affected sectors” such as lorry drivers, farmers, shipping companies, and fishermen.”
Spain’s efforts to address soaring inflation have been working in recent months, as the figure has fallen from a record 10.8 percent in July to 6.8 percent in November.
Food prices, however, have remained high, rising by 15.3 percent year-on-year in November.
During his speech Sánchez also declared that the discount on electricity and gas prices would be extended by six months and the ban on cutting energy supplies to vulnerable households would remain in place throughout the year of 2023.
Similarly, the 50 percent discount on season ticket prices for urban public transport will be extended for the first half of 2023.
Source
https://www.greenwichtime.com/news/article/Spain-scraps-value-added-tax-on-staple-foods-in-17679281.php
https://www.thelocal.es/20221227/spain-axes-vat-on-basic-foods-to-ease-inflation-pain/
https://spanishnewstoday.com/relief_for_shoppers_as_spanish_government_reduces_vat_on_food_1951446-a.html
Image Credit: La Moncloa
