The country’s left-wing government approved a new raft of measures to tackle the cost of living crisis, among them a reduction in VAT on food products over the next six months.
“The government is going to ensure that VAT reductions and aid to farmers are transferred directly and immediately to food prices,” Prime Minister, Pedro Sánchez, said when presenting the third package of measures to mitigate the economic fallout of the war in Ukraine.
Basic foods currently on a 4% tax rate would be VAT exempt, and others taxed at 10% would be downgraded to a 5% VAT rate, EURACTIV’s partner EFE reported.
Staple foods such as bread, flour, milk, cheese, eggs, fruits, vegetables, legumes, potatoes and cereals will no longer be taxed. Other foods, such as oils and pasta, have been downgraded from a 10% VAT rate to 5%.
The progressive cabinet, forged by the socialist party (PSOE/S&D) and left-wing Unidas Podemos (United We Can/GUE-NGL), has also approved €300 million in direct aid to farmers to offset the increase in the cost of fertilisers. Some 4.2 million low-income families would be handed a €200 check.
“This government will continue protecting ordinary people,” Sánchez stressed.
(Fernando Heller | EuroEFE.EURACTIV.es)
Source: euractiv.com
