The Government will maintain VAT reductions on food in full pre-campaign

2023-06-08 12:43:55

With just over three weeks to go before the term of the current anti-crisis aid plan expires, the Government begins to glimpse what decisions it will take on June 30 in some of the measures included in that program. Specifically, two of those with the greatest social impact, the VAT reductions in force on certain foods and energy, would be extended at least until the end of the year, taking into account the current evolution of prices.

This has been insinuated by the Minister of Finance, María Jesús Montero, who has indicated that the Executive will maintain these measures that will soon expire “if abnormal inflation situations persist.” In fact, inflation in the food basket continues to rise at a considerable rate of almost 13% in April, pending the final data for May, which will be published in the middle of the month.

“If (the abnormality) persists, the Government is not going to withdraw those stimuli that make it possible to lower bills and therefore alleviate domestic economies or the income statement of the business sector itself,” said Montero, who added that the Government will take his decision “by limiting the data until the last minute”.

In addition to the VAT on basic foods, pasta and oils, there are many other anti-crisis measures that expire on June 30 that the Government must review in a new decree law that, after the dissolution of the Parliament due to the call for general elections, will have to validate the Permanent Deputation of Congress.

The VAT on the electricity and natural gas bill is also at a minimum (5%) after the Executive approved its reduction (first in the electric case and then in the gas) to cushion the rise in prices of the last year and a half. In theory, this measure will remain in force until energy costs stabilize at the historical average, from which they are still some way off despite the reductions in recent months.

Other aids that expire at the end of this month are the reduction in the price of passes and multi-trip tickets for public transport (not the discount for Renfe and medium-distance commuter trains, which is maintained throughout the year); the discount of 20 cents per liter on fuel for the professional road transport sector and aid to the autonomous communities and town halls for gasoline for public buses.

The extension of the temporary suspension of the Tax on the value of the production of electrical energy also concludes on June 30; the reduction of 80% of tolls in the electro-intensive industry; VAT at 4% for masks and 0% for goods and benefits to combat Covid; and the limitation to the maximum price in the butane bottle. Nor may the increase in energy costs constitute, as of June 30, an objective cause for dismissal in companies that have benefited from any aid.

At the same time, the exemption for the owner of the fishing vessel or vessel and its substitute will be terminated, provided that the fresh catch accessed the port by sea. In addition to this, the extension of the ERTE in companies and workers in the Canary Islands affected by the La Palma volcano will end.

In addition, on June 30 the extraordinary extension of the habitual residence lease contracts will conclude, the procedures and launches will be allowed again and the negotiated procedures without publicity will be suspended. Through this last procedure, public buyers are allowed to acquire supplies and services in the shortest possible time.