The President of the Government, Pedro Sánchez, announced the extension of the measure that reduces the VAT on certain foods, which was scheduled to end on June 30. This decision, which must be presented to the Congress of Deputies, responds to the persistently high inflation in food prices. "It's a huge effort for the public coffers but necessary for our homes," stated Sánchez in an interview.
The Independent Authority for Fiscal Responsibility (AIReF) has indicated that revenues have decreased by 1,072 million euros this year because of this measure. VAT will remain at 0% for staple foods such as bread, flour, milk, cheeses, eggs, fruits, vegetables, legumes, tubers, and cereals, and 5% for pasta and oils, a policy implemented on January 1, 2023.
According to data from the National Institute of Statistics (INE), the food price index increased by 4.7% in April. However, some products have experienced more significant price increases, such as olive oil, which increased by 68.1% over the previous year, and other products such as potatoes, sheep and goat meat, chocolate, confectionery, frozen legumes, vegetables, and fresh fish have also registered considerable increases.
Source: efeagro.com