In a scenario where families suffer the dire consequences of high inflation, the VAT cut, approved by the central government to lower the prices of basic foodstuffs, is structured as a minor relief for the country’s economies. But the measure coincided with the enactment of the new tax on non-reusable plastic containers, which reduced its effectiveness. This is condemned by manufacturers and supermarkets. He warned that the rise in container prices is already starting to prevent consumers from noticing the discount in their shopping cart.
The basic food discount, which will continue until 30 June, entered into force on 1 January. VAT rate on products such as bread, bread flour, milk, cheese, eggs, fruits, vegetables, legumes, potatoes, tubers and cereals, which have a super discount of 4%, has increased to 0%, while oils and pastes have increased from 10% to 10%. It has been reduced to 5. Well, what seems not to have been taken into account is that at the same time, a new tax of 0.45 euros per kilo of non-recycled plastic used in the production of non-reused materials was also introduced. utensils are a type of utensil used for most staple foods.
This was expressed by Pedro Reig, director of the Valencia Community Supermarkets Association (Asucova). The Spanish Government was the only one in the European Union to decide to implement this new tax burden., underlines that “unlike other countries that postpone this, taking into account the complex situation that exists at the international level and the current inflation scenario”. Reig also said that “community officials have proposed this tax on non-recyclable packaging, but when compulsion comes, It applies to all disposable containers in Spain.“.
In this sense, the supermarket representative points out that these containers are most common in fresh products such as vegetables and fourth-class products, where this tax has already begun to weigh on. And according to Reig, “businesses have implemented VAT reductions and as a result, they have made products cheaper, even at the expense of company margins. The problem is, our suppliers will update prices and gradually apply new tax on plasticso we don’t know how long the effects of the VAT reduction will last”.
Likewise, as Reig points out, distribution faces a host of new regulations that imply cost increases. “There are many open fronts against profitability and margins. and that they created a complex situation for the sector, upon which they had to endure some criticism”.
Producers have already seen how the price of their containers has increased due to the new tax rate, olive oil is an example. Julián Úbeda, head of the olive sector at La Unió, points out: the tax “ate” the VAT deductionSomething Joaquín Sempere of the El Tendre mill in Elche agrees and refers to this increase in costs.
10% discount
The market analysis conducted by the Financial Users Association (Asufin) at the beginning of January concluded that there is a VAT discount in a shopping cart type that includes eggs, milk, bread, pasta, oil, fruit or vegetables. an average reduction of 10% or the same thing about 3.5 euros less. However, as a result of the new tax on plastic containers, this situation has begun to change and this has led to an increase in prices, which will gradually increase.
Tax is a threat to the competitiveness of producers
The new tax will mitigate the effects of the VAT reduction, making products that are not affected by this reduction more expensive, and will also negatively affect packaging manufacturers. This is condemned by Foia de Castalla, a region that concentrates much of this sector at the provincial level, on the basis that its entry into force increases costs for companies in terms of management while reducing their competitiveness. Fears are that customers are betting on packaging made with other materials that are not subject to this new tax burden, or that they are already reducing the amount of plastic used, as it is already happening.
Source: Informacion
James Sean is a writer for “Social Bites”. He covers a wide range of topics, bringing the latest news and developments to his readers. With a keen sense of what’s important and a passion for writing, James delivers unique and insightful articles that keep his readers informed and engaged.