The Government has announced the third anti-crisis package approved by the Council of Ministers with aid, among others, for food, as well as the end of the general discount of 20 cents on fuel, which will only be maintained for professionals.

The Council of Ministers has approved the third package of measures in response to the consequences caused by the war in Ukraine and which will include aid to alleviate the impact of inflation on the shopping basket.

The measures will mean a total of 10,000 million euros and the main novelty comes from the food side, where the government partners have put the focus after two previous decrees focused on alleviating the impact of the war on energy prices.

Main measures that have been approved

Among the measures that the Government has approved, the most prominent are those related to food and the shopping basket.

Thus, a check of 200 euros has been approved for income of less than 27,000 euros per year and with assets of no more than 75,000.

On the other hand, it has approved the elimination of VAT on staple foods and the reduction of this tax from 10% to 5% on pasta and oil.

Another notable measure is that a six-month extension of the price has been approved for rentals that expire before June 30, 2023, while a limit of 2% will be placed on the annual updating of rental contracts.

VAT reduction

The VAT reduction will be applied to the following products:

  • Staple foods (bread, bread flour, milk, cheese, eggs, fruits, vegetables, legumes, potatoes, cereals) goes from 4% to 0%
  • Oils and paste, drop from 10% to 5%
    Therefore; all products are subject to VAT 10% (meat, fish, oil or pasta), except those that are considered staple foods such as milk, eggs, fruits and vegetables, bread or legumes, which are taxed with the super-reduced type of the 4%. Although, there are certain foods that do not fit into any of these categories, such as sugary or alcoholic beverages, to which the general VAT rate of 21% is applied. Families will have a help of 200 euros for purchase if they meet certain requirements.

The measures aimed at making shopping baskets cheaper will mark a turning point.

End the general discount on gasoline

The Government has also confirmed the end of the general bonus of 20 cents per liter of fuel and only the most affected sectors will be able to benefit from it: professional road transport, farmers, shipping companies and fishermen.

The gas VAT reduction from 21 % to 5 % in force since last October, as well as the VAT and other taxes on electricity and the freezing of the butane cylinder, are also extended by six months.

This package also includes the increase of 15 % non-contributory pensions in 2023, which will also affect the minimum vital income (IMV), as well as the extension of the limit of 2 % to the increase in rents already agreed with Bildu.

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