Spain will maintain until the end of the year the elimination of VAT on basic foodstuffs and 50 percent discounts on public transport tickets in response to inflation, the government announced on Tuesday.
Suspension of VAT (consumption tax) on products such as bread, fruits or vegetables and a reduction of up to 05% in the case of olive oil and pasta came into force in Spain on January 1 for a period of six months and was extended this Tuesday for another six months until December 31, 2023.
Other measures in place in Spain since last year or early 2023 in response to inflation (rising prices) were also extended on Tuesday for another six months by the Council of Ministers, including a 50% discount on public transport tickets. , discounts on agricultural diesel fuel and for professional hauliers, maximum caps on the cost of gas bottles or assistance with paying electricity bills.
Economy Minister and First Vice President of the Spanish government Nadia Calvinho justified the extension of measures, contrary to the recommendations of the European Commission, by the “increased uncertainty” around the war in Ukraine.
Nadia Calvinho stressed, however, that the measures are compatible with the “route” of reducing the public deficit of Spain, as evidenced by the forecasts of national and international organizations, and that, on the other hand, all measures have proven to be effective in recent months, with inflation in Spain in currently one of the lowest in Europe.
During 2022, Spain approved several packages to respond to inflation above 3% of gross domestic product (GDP), around 45,000 million euros, including direct assistance to consumers and companies and tax incentives such as a VAT reduction on electricity and gas or a discount on purchase of fuel.
In an attempt to respond to rising food prices, a new set of measures went into effect in January, including the suspension of VAT on certain food products.
Spain closed last year with the lowest inflation rate in the European Union (5.7%), after one of the highest readings in the first half of 2022 and recording the country’s highest inflation since 1984 in July (10.77%). .
In May, Spain continued to have one of the lowest inflation rates in the European Union (3.2%).
According to Nadia Calvinho, the new support package, approved on Tuesday by the Council of Ministers, is the seventh since the start of the war in Ukraine, and in general, all assistance and measures already amount to 47 billion euros.
The extension of these measures comes in the middle of the electoral period, less than a month before the July 23 general legislative election, called by Prime Minister Pedro Sánchez after the defeat of the socialists he leads in municipal and regional elections in May.
A general election was scheduled for December, when the term of the current legislature would end.
Author: Portuguese
Source: CM Jornal
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