The Treasury calculates that households will save 1,320 million this year due to the reduction in VAT on food
MADRID, 2 Jul. (EUROPA PRESS) -
The VAT reductions on basic food and energy approved by the Executive to deal with the economic consequences of the war in Ukraine and the rise in prices have meant savings for Spanish households of 935 million euros between January and May of this year, according to the latest collection report recently published by the Tax Agency for the month of May.
It is, specifically, the suppression of the 4% VAT that is applied to all staple foods (bread, flour, milk, cheese, eggs, etc.), the reduction from 10% to 5% of oil and pasta and cuts in the VAT rate to 5% in electricity and natural gas, wood and pellets.
Although initially the VAT reduction on food was set for the first half of the year, this week the Council of Ministers approved a Royal Decree-Law to extend some of the measures to deal with the economic consequences of the war in Ukraine and the rise in prices, such as the one related to the reduction of this food taxation.
Thus, in this new package, the Government has decided to maintain the VAT reductions from 4% to 0% on basic necessities and from 10% to 5% on other basic products that it launched at the beginning of this year.
According to the calculations of the Treasury, with this extension for the second semester of 2023, the savings for families both for the products that will go from 4% to 0% and for what will drop from 10% to 5% would be 661 million, as It already happened in the first half of the year.
In other words, households will save 1,320 million this year thanks to these reductions, according to the figures handled by the Department headed by María Jesús Montero.
These tax reductions on food VAT will remain in force until December 31, 2023, provided that the interannual rate of underlying inflation is above 5.5%. If it falls below that rate in the month of September, whose data will be known in October, the usual VAT tax rate on the aforementioned food in the last two months scheduled for the application of the measure would be recovered. That is, since November 1.
The Royal Decree-Law approved by the Council of Ministers contemplates the extension of the limitation of the maximum sale price of bottled liquefied petroleum gases. This is the area in which the butane cylinder falls, whose maximum price was limited in June 2022 at 19.55 euros. This final price for the consumer, which is regulated and reviewed every two months, may not exceed that figure. At present, thanks to the relaxation of international markets, the bottle costs 15.96 euros.
In energy matters, and as already established in Royal Decree-Law 20/2022 of December 27, in this second semester the tax reductions in the energy field that have been applied since mid-2022 are maintained.
Since the beginning of the energy price crisis in 2021, the Government has applied energy tax reductions for a total value of 21,522 million euros: 11,274 until the end of 2022, and 10,248 by 2023.
It must be remembered that this collection effect will affect both the General State Administration and the territorial administrations, since several of the measures have an impact on the collection of VAT and the Special Tax on Electricity, whose yields are transferred, partially or totally, to the autonomous communities.
Only in the case of VAT reductions for electricity and natural gas, wood and pellets, the revenue impact between January and May is 457 million euros.
