The reduction in VAT on foods considered essential is one of the big announcements of the shock plan to control inflation presented yesterday by the Government. However, there are doubts about how the measure will be applied and to what extent it will affect the pocket of consumers. In this sense, the first vice president of the Executive, Nadia Calviño, has assured today that "there will be sanctions if it is not complied with" and has asserted that families will begin to notice its effect "immediately".
The also Minister of Economy has detailed that the National Commission of Markets and Competition (CNMC) will control that distributors and establishments apply the reduction in VAT on food. "We will be very vigilant", she has asserted in an interview on TVE, while she has clarified that the decree approved yesterday in the Council of Ministers includes "the obligation" to "positively impact" the tax reduction on consumers .
The decree, published this Wednesday in the Official State Gazette (BOE), establishes that the reduction must "fully benefit the consumer" without that amount "can be used totally or partially to increase the business profit margin." In the case of eggs, vegetables, fruits, legumes, bread, cheese and milk, VAT will be eliminated. While it will drop from 10% to 5% in the case of pasta and oil.
This tax reduction, which forms part of the third package of measures to alleviate the impact of the war, could be withdrawn within six months if underlying inflation – which does not take into account the most volatile products such as energy and food without elaborate- lower than 5.5%.
Until now, the Government had been applying VAT reductions on gas and electricity bills, a measure that has also been extended for another six months. However, it has decided to withdraw the general fuel bonus, from which only professional road transport, farmers, shipping companies and fishermen will benefit from now on. The discount of 20 cents per liter will therefore disappear for private customers as of January 1.
A check for 200 euros for families with an annual income of less than 27,000 euros was also approved yesterday. Calviño explained that it is a single payment that can be requested at the Tax Agency between February and March, providing the account number and information to meet the requirements, so that it can be collected "immediately".
