To combat the rising expense of living, the Spanish government declared on Tuesday that all basic food items would be totally exempt from VAT. According to media reports, the package of policies includes further tax breaks for other important purchases, with a total estimated value of $10.6 billion.
According to AFP, Spanish Prime Minister Pedro Sanchez announced at the end-of-year press conference that ‘for six months, we would lower VAT on all basic foods from 4.0 percent to 0.0 percent.’
He continued, ‘VAT on oil and pasta would also be reduced from 10% to 5%.
Sanchez said that the ‘basic food items’ currently include bread, milk, eggs, cheese, fruit and vegetables, and cereals and he also announced a one-off payment of 200 euros to ‘families with incomes lower than 27,000 euros’ in order to simplify the situation for the lower-income groups.
The cost of living crisis has been brewing in parts of Europe as part of the Ukraine-Russia war and since the start of the crisis and the Spanish government has spent in excess of $45 billion.
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