The coalition government plans to extend the VAT reduction on food if the current price level is maintained; This is a measure designed to alleviate the historical increase in the shopping basket, although consumers, the sector and experts agree that its impact has been “limited”.
After months of runaway inflation, the Government broke up in the middle of Christmas to approve the abolition of VAT on basic foods and reduce that of oils and pasta from 10 to 5%. Vice President Nadia Calviño insisted in New York this Friday that the Executive intends to extend this measure, as requested by the sector, although she conditioned this decision on maintaining current prices, “given the influence of these prices on the pockets of Spanish families”.
What has happened to prices so far?
Among the foods to which VAT has been lowered, there have been disparate behaviors in their prices so far this year, due to the fact that many factors influence their formation and not only the tax burden.
Legumes (+14.6%), rice (+8.2%) and potatoes (+.2%) are the ones that have become more expensive, according to the CPI data for April; at the other extreme, the fall of 3.4% in the case of fruit and 1.9% for pasta.
The “cost” for the arcades of the State
Although some projections spoke of 700 million, the first official data have left at 254 the millions that the State arcades have stopped entering due to this tax cut until April. In per capita terms, it amounts to just over five euros and is just over 40 euros per household.
The sector remains united for its extension and they argue that the market is still stressed and, in any case, they insist on extending the cuts to meat and fish, which account for 38% of food spending, to improve the limited impact of this cut.
A short measure for consumers
Consumer organizations insist that this measure fell short from its origin. Thus, the spokesman for the Organization of Consumers and Users (OCU), Enrique García, points out to EFE the limited scope by not incorporating the drop in fish or meat, which are the items that take the most part of the budget.
In a context in which those of extreme vulnerability have gone from 8 to 11% in one year as a result of family inflammation, the OCU considers that it is still early to withdraw this measure.
Much more forceful are shown from Facua; its president, Rubén Sánchez, regrets that this measure has only been intended to “make up” the large price increases. He also denounces the lack of control by the authorities; Its solution involves the intervention of the prices of basic foods.