The Portuguese government’s left-wing is implementing a temporary removal of VAT on 44 basic food items including bread, meat, and eggs among others. The measure is to combat high inflation and is part of an agreement with producers and retailers that will also provide financial support to farmers and animal breeders. The measures will cost the state about 600 million euros according to the Prime Minister. Parliament must approve the package, but the government holds the majority there. Inflation in Portugal was 8.2 percent in February, which has strained many households that have lower wages than other countries. The Prime Minister claims that the inflation is largely due to the Russian invasion of Ukraine and believes that price increases may continue even after the measures are put in place.
The left-wing government in Portugal wants to make bread, meat and eggs, among other things, cheaper by temporarily removing VAT on 44 basic foodstuffs. The measure is to combat high inflation and is part of an agreement with producers and retailers in the country, reports Spiegel.
In addition to the price reduction, financial support for farmers and animal breeders is included in the agreement. In total, the measures will cost the state around 600 million euros, according to Prime Minister Antonio Costa.
The package of measures must be approved by parliament, but there the government has a majority.
Costa: Inflation is due to the war
Inflation in Portugal was 8.2 percent in February, a big strain for many households that have lower wages than in, for example, Sweden and thus less leeway to manage increased expenses.
Prime Minister Costa blames the inflation above all on the Russian invasion of Ukraine and believes that it cannot be ruled out that price increases will continue even after the measures are introduced.
– No one knows how long this war will last, and as long as it lasts there is a danger that production costs will increase further, he says according to Spiegel.
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