Extension of VAT reduction on food to fight inflation in Spain

In Spain, the reduction of VAT on certain foods, which was due to end on 30 June, will be extended, says Prime Minister Pedro Sánchez. This decision, which will be presented to Congress, is in response to persistently high food price inflation. During an interview, Sánchez stressed that this action is an "enormous effort for the public coffers, but necessary for our households".

 

The Independent Authority for Fiscal Responsibility (AIReF) has indicated that this measure has reduced revenue by 1,072 million euros this year. VAT will therefore remain at 0% for basic foodstuffs such as fruit, vegetables, pulses, tubers and oils, among other foods, a policy that will be in force from 1 January 2023.

 

According to the National Statistics Institute (INE), the food price index rose by 4.7% in April. Products such as olive oil have seen more significant increases, with an increase of 68.1% over the previous year. Other products such as potatoes, pulses and frozen vegetables, among other products, have also recorded notable rises.