this price increase feeding on something as simple as foodIt has led to public debate on different alternatives for reduce the purchase receiptLike the reduction in VAT, an indirect tax that ranges from 21% on alcoholic beverages to a “super-discounted” 4% on bread or milk.
After decades of stability in food prices, which was damaged by the VAT increase in 2012, the rise in prices is accelerating. alarming levels As reflected monthly by the National Institute of Statistics (INE), which marked an increase of almost 14% in August.
And given this situation, various proposals have been launched, ranging from the basket of basic items with frozen prices by Vice President Yolanda Díaz’s Christmas, to the reduction of taxes, particularly VAT, which distribution employers have again insisted on, and have so far been rejected by the Government.
But, How much of the budget allocated by the Spaniards for the purchase of food and drink remains in the State collection? The answer depends on the foods that make up this basket.
4% “natural” foods
Value Added Tax (VAT) is subject to a 1992 law, but includes several amendments for food products.
The law officially says that 4% taxed common bread; baking flours; natural, certified, pasteurized, concentrated, skimmed, sterilized, UHT, evaporated and powdered milk; Cheeses, eggs, fruits, vegetables, legumes, tubers and grains, which are “natural products according to the Food Code” that curiously date back to 1967 and do not define what natural foods are.
With the development in legislation, food is included in this minimum VAT, with the new definition of common bread, which includes breads made with flours other than wheat or wholemeal flours and other grains, as in the bread quality standard (2019). VAT on all this from 10% to 4%.
10% general group
“Products customarily and appropriately used for human or animal nutrition“They were taxed at 8% until the 2012 reform, when tax rates were raised to 10%.
This group includes, for example, fish and meat; That’s why, in the face of the rise in the CPI, voices are heard calling for industries to join the “club” of staple foods. A super-discounted VAT claim of 4% for fish.
Alcohol and 21% sugar-sweetened beverages
After the 2012 reform, in which this rate was increased to three points, a tax rate of 21% is applied to alcoholic beverages, just like tobacco.
For its part, soft drinks, juices and soft drinks with added sugar or sweeteners have the same proportion (21%) since January last year.
It was in October 2020 when the government announced that it would increase the VAT increase on sugary and sugary drinks from 10% to 21% in the General Government Budget project for 2021. healthier habits among the population.