The elimination or reduction of VAT on certain foods will be maintained in 2024 after the Government saved in extremis this week the decree that extends anti-crisis measures to alleviate the economic consequences of the war in Ukraine or the increase in energy costs and reinforce the social shield. These tax reductions will be applied to some basic foods for a minimum of six months, with the purpose of making the shopping basket cheaper. Although most of the products are the same ones that already had a discount, there are some new features.
The royal decree was approved in a second vote, after a tie occurred in the first, and was validated by the minimum vote (with only one vote difference). With its processing, the VAT on basic foods will be 0% and that on oils and pasta will go from the usual 10% to 5%, although this is one of the changes compared to last year.
Olive oil had a profound impact on food in 2023, becoming one of the products that increased its price the most (extra virgin was 70% more expensive in December than at the beginning of the year). The drought continues to hit the sector hard, and some predict that the increase in prices will continue in 2024. For this reason, Junts (whose deputies did not participate in the vote on the decree to facilitate its approval) indicated that the pact with the PSOE includes the reduction at 0% VAT on the oil, which thus becomes an essential food. The director of the National Association of Industrial Packaging and Refiners of Edible Oils (Anierac), declared to Efeagro on Wednesday that the decision was “good news for consumers and perhaps helps to recover part of the consumption that has been lost.”
The decree contains the third package of measures to combat the effects of inflation and the Government has stressed that the reduction cannot be dedicated to increasing business profit margins, but rather will ensure that “VAT reductions and aid to farmers are directly and immediately affected by food prices.
The reduction includes foods such as bread, milk, eggs, fruits and vegetables, legumes and cereals, but there are still some absences such as meat and fish, both fresh and frozen. These exclusions have been, as they were at the time, harshly criticized by the productive sector and consumers. The general food group, which includes meat and fish, is taxed at 10%, and sugary drinks or alcohol are taxed at 21%. Next, we review which foods will enjoy a discount in 2024.
