The government is calling for a reduction in VAT on staple foods, which will be billed and reflected on tickets paid for by consumers. For this reason, it calls for it to reflect from January 1 the differences that exist when paying the current tax and what will exist when 2023 begins.
The Minister of Agriculture, Fisheries and Food Luis Planas assured this Wednesday that “distribution will be affected” by this reduction and that the government intends to supervise that this is the case. We believe, but we are going to be vigilant,” he assured in an interview on Antena 3.
Planas ensures that supermarkets and food stores have the “means” to demonstrate that they are using the VAT reduction. For example, in the “purchase ticket showing before and after reduction” of this tax. Also, state what the old price was before December 31 and the new price from January 1.
In other words, the reduction of VAT to zero on staple foods and to 5% on oil and pasta serves to give shops a “customer’s attention” to convey the idea that “we are the ones who use it better”. .
Supervision through CNMC
As for what and how it will be monitored, what is included in the official state gazette (BOE) this Wednesday is that “the reduction in the tax rate will fully benefit the consumer.” With a nuance: “Therefore, the amount of the reduction cannot be fully or partially dedicated to increasing the profit margin of the business, without causing damage by further increasing prices in the chain of production, distribution or consumption of products. Additional social responsibility commitments made and published by affected sectors”.
From there, “the effectiveness of this measure is checked through the price evolution monitoring system, regardless of the actions that correspond to the National Market and Competition Commission within its powers,” the BOE indicates, without giving more details.
Additional measures if necessary
It should be remembered that what was approved by the Council of Ministers this Tuesday involves the reduction of VAT from 4 to 0 percent on basic food products (common bread, flour, milk, eggs, fruit, vegetables, legumes or potatoes) and reduction. 10% to 5% applies to oils and nutritional pastes. “Both reductions are imposed on a temporary and extraordinary basis from January 1, 2023 to June 30, 2023, taking into account the evolution of the annual rate of core inflation, if it falls below 5.5% in the March data to be announced in April.” .
Luis Planas also speculated that the government had other measures in place to reduce the cost of the shopping cart and that there could be more. “We hope they will be effective,” he noted, but “if others are needed, they will be accepted.”
As for the absence of meat and fish on sale, he admitted that VAT has been reduced on “those” products, which means “more volume and a large amount of expenditure” in households and that “savings will depend on the composition of each shopping basket. .
You remember that the average household spends 16% of its income on the shopping cart. Instead, it is 20% for families living on the minimum wage. For this reason, Planas has convinced measures to be taken on products that directly affect the increase in food prices, which in Spain exceeds 15% according to the November CPI data.
Source: El Diario