Should VAT be abolished? Spain recently announced the abolition of VAT on basic food products. Asked this Monday night on the set of the Quotidien program on TMC, Bruno Le Maire considered that this was not the most effective solution to implement in France, considering that France “already had an average VAT rate that is the weakest of all countries in the euro area.
For the Minister, such a measure would not lower prices on the shelves of French supermarkets. The abolition of VAT on food products “would fill the margins of distributors” and “consumers would not see the difference”, argued Bruno Le Maire. “We can always wait [que les distributeurs] game” at the lowest prices, “but I’m a realist,” he continued.
Milk, bread, fruit…
The Minister of Economy assured that the Government had “more effective” ideas for France, in reference to the energy shield. According to him, a VAT reduced to 0% on basic necessities “would cost 10,000 million euros”, compared to the “46,000 million euros” of 2023 for the energy shield. The latter “costs us almost five times as much, so it’s five times more effective,” he said.
The Spanish government announced at the end of December the abolition of VAT for the next six months on basic food products to deal with the country’s high inflation. VAT will drop from 4% to 0% on products such as milk, fruits and vegetables, bread or cereals. For other products such as pasta or oil, it will drop from 10% to 5%.
Source: BFM TV
