Expect noticeable price rises at Spanish supermarket tills in October as the anti-crisis VAT reduction on food is about to come to an end.
The VAT reduction on essential foodstuffs was originally introduced to alleviate the expense of the average family shopping basket. It was brought in to combat the surge in prices following the outbreak of war in Ukraine. In June 2024, the Spanish government extended the VAT reduction until September 30. But now, time’s up, and value-added tax will begin to return to our shopping receipts once more. So, take note of prices on the supermarket shelves from October.
Tax revenue fell on grocery shopping
Cutting VAT on essential food items meant a drop in tax revenue to the tune of €440 million in the first quarter of 2024. Apart from being a welcome measure, it was also hoped it would keep inflation down on basic products. This return to taxing essentials has been in response to the European Commission calling for EU member states to gradually reintroduce their VAT.
From October 1, 2024, there will be a 2 percent rise on the VAT applied to food products that until now were at 0%, while other products will go from 5 percent to 7.5 percent.
Prices on oil, eggs, fruit and veg, all set to rise
Where we are likely to see rises: Vat on olive oil will rise from 0 percent to 2 percent, as will bread; basic flour; milk; cheese; eggs; fruit, vegetables, and pulses; and cereal. While Vat increases from the reduced 5 percent back up to 7.5 percent will be noted on pasta and seed oils such as sunflower oil. The reintroduction will be gradual on a month-to-month basis.
