The Spanish Government has announced on Tuesday the elimination of VAT on basic foods and aid to families, farmers and the gas industry as measures to deal with the energy crisis and inflation caused by the war in Ukraine.
Among the measures now announced by the President of the Spanish Government, Pedro Sánchez, is the end of the collection of the Value Added Tax (VAT) on foods considered essential, such as bread, milk, cheese, eggs, fruit, vegetables and legumes, potatoes and cereals.
These products had a 4% VAT.
The Spanish Government has also decided, in a Council of Ministers held today, to reduce VAT on olive oil and pasta from 10 to 5%.
In addition, the Madrid executive will provide a package of aid to various sectors, starting with families with an annual income of up to 27,000 euros.
As announced, 4.2 million families will receive aid of 200 euros, and it was also decided that the conditions of the leases that end on June 30, 2023 will be extended for six months to avoid abusive increases.
Farmers will also receive direct aid from the State, worth 300 million euros, with the aim of offsetting the increase in costs due to the increase in the cost of fertilizers, while the gas industry will receive a new liquidity line of 500 million of euros.
The Spanish Government will also provide 450 million euros in aid to the ceramic sector and other subsectors, in addition to investing 3.1 billion euros in industrial decarbonisation.
On the other hand, Sánchez added that some measures already adopted will be maintained next year, such as free medium-distance public transport trips, a 30% reduction in the cost of urban and interurban transport and the six-month extension of the tax. reduction in electricity and gas.
The aid also provides for the maintenance, in 2023, of the freezing of the maximum price of gas bottles, the extension of the 2% limit in the annual updates of housing rents and the suspension of evictions of vulnerable families.
Next year the ban on cutting off the supply of essential services, such as water, electricity or gas, will also be maintained, and the extensive social subsidies started this year will be maintained.
The 15% rise in the minimum vital income and non-contributory pensions will also be maintained and the possibility of partial reform will be extended until 2024 to favor generational relief and job creation, especially in industry.
The Spanish Government also determined an extension in time of the subsidies granted to the unemployed affected by the volcanic eruption on the island of Las Palmas and maintained the prohibition of layoffs in companies adhering to the aid program due to the increase in energy costs caused for the war in Ukraine.
As of December 31, the discount of 20 cents per liter of fuel will only apply to road transport professionals and farmers, while fishermen will receive direct aid worth 120 million euros.
The Council of Ministers also approved an 8.5% increase in pensions, after the rise in inflation, to guarantee the purchasing power of retirees, and gave the green light to improving active retirement, which allows professionals Primary care health workers, family doctors and pediatricians of retirement age continue to work for the next three years.
The measures decided today by the Council of Ministers constitute the third aid package from the Spanish Government to alleviate the economic and social consequences of the war in Ukraine and will have an impact of 10,000 million euros.
Despite the fact that in recent months Spain has managed to moderate the rise in prices and is already the country with the lowest inflation in the euro zone, the Government has decided to promote this support package to “reduce the cost of primary goods and services related to with food and energy.
As Pedro Sánchez announced at a press conference, the total resources allocated by the executive will allocate a total of 45,000 million euros to protect the middle and working class and the productive fabric of the country against the increase in the cost of living.
Source: TSF
