Medina argues that only the treaty guarantees exemption from VAT in the pockets of the Portuguese.

Finance Minister Fernando Medina said on Wednesday that only an agreement signed this week with the distribution and manufacturing sectors would ensure that the VAT exemption of 44 food items “finds” in the pockets of the Portuguese.

In RTP 3’s Big Interview, aired this Wednesday, the official admitted that there used to be a “real risk” that even without VAT, products would not fall in price, and that this is the reason he was against the measure, and now is for it.

Fernando Medina believes that thanks to the pact signed this week between the government and representatives of distribution (APED) and production (CAP farmers), “conditions for establishing zero VAT by agreement” have been created, ensuring that the amount of unpaid VAT tax “goes to pocket” of the Portuguese.

“The savings that will be returned to the family in a basket of 100 euros per month will amount to 12 euros,” the minister said, referring to the proposal for VAT exemption, which was discussed this Wednesday by parliament after its approval by the Council of Ministers. but has not yet entered into force.

The minister said the most vulnerable are those who will benefit the most from this new measure, designed to mitigate the rise in the cost of living, as the share of this VAT exemption is larger relative to their income.

Fernando Medina stressed that the purpose of 0% VAT is to lower and stabilize prices, but acknowledged that such a reduction would only occur for some products, as others “will not return to their previous prices.”

The minister said fixing prices instead of exempting VAT would be a bad decision, as “it could lead to the possible disappearance” of some goods from the food chain.

The government bill exempts from VAT the list of food products, which includes vegetables, meat and fish in fresh, chilled and frozen form or in fats, olive oil, vegetable oils and butter.