Prices of basic food items rise as VAT reduction ends
Consumer basket will have a temporary tax of 2% until January, when it will rise again
Basic food products, including olive oil, will no longer benefit from the reduced VAT from Tuesday.
Products that previously had their VAT reduced to 0%, such as olive oil, milk, bread, eggs, cheese, fruit and vegetables, will now be taxed at 2%.
Pasta and seed oils, such as sunflower oil, will see their VAT increase from 5% to 7.5%.
This is the first increase in VAT, which aims to gradually restore the tax levels of 2022, when the Spanish government introduced cuts to alleviate the rising cost of living due to the war in Ukraine.
In January next year, VAT will rise again: products currently taxed at 2% will rise to 4% and those at 7.5% will jump to 10%.
Olive oil will be the most affected, with estimates suggesting that the price of extra virgin olive oil will rise by about 25 cents per liter, according to the consumer organization Facua.
In order to control the price of olive oil, the Spanish government has classified it as a basic foodstuff, ensuring that its VAT will never exceed 4%.
The first step toward restoring regular VAT levels comes at a time when prices are stabilizing.
In fact, inflation in Spain reached its lowest level in three and a half years in September, according to preliminary data from the National Statistics Institute (INE).