Lower the VAT on bread, milk and eggs: these are all the support measures of the Government |  Economy

Lower the VAT on bread, milk and eggs: these are all the support measures of the Government | Economy

The Government gives a new coup, on the eve of a 2023 that will be marked by the elections. The president, Pedro Sánchez, announced on Tuesday a new battery of anti-crisis measures due to the war in Ukraine. The aid includes a check for families with incomes of less than 27,000 euros and a reduction in VAT on basic foods such as bread, milk and eggs. The measures, which will have an economic impact of more than 10,000 million, will come into force on January 1, this Sunday. These are all the aids announced by the Executive after the last Council of Ministers of the year:

VAT reduction

On the one hand, the value-added tax on staple foods is eliminated until the end of June: bread, bread flour, milk from any animal species, cheese and eggs. Also fruits, vegetables, legumes, potatoes and cereals that have the status of natural products in accordance with the Food Code. These were already in the super-reduced VAT of 4% and now they go to 0% during this period. In addition, the Prime Minister, Pedro Sánchez, has announced that the rate for oils (including olive oil) and pasta is also being reduced, which is reduced by half: from 10% to 5% over the next six months.

check for families

To help households to alleviate the rise in inflation, especially regarding the increase in the cost of basic products, the Council of Ministers has put forward a grant of 200 euros for 4.2 million families, those with annual incomes of up to 27,000 euros. This payment will be made only once by bank transfer: you will have to request it at the Tax Agency and provide the account number where you want to receive the payment, according to government sources.

Help for public transport

The Executive maintains the free subscriptions for the Cercanías, Rodalies and Meda Distancia trains during 2023. In addition, it has decided to maintain the 30% reduction in urban and interurban public transport. Although on this occasion it is linked to the autonomous communities and municipalities complementing it up to 50%. That is to say, in those territories where they do not contribute those other 20 points, the Government will not pay its part either.

Light and gas taxes

The reduction in taxes on electricity and gas has also been extended for the next six months. Thus, the VAT on electricity will remain at 5% (compared to the usual 10%), the generation tax is abolished and the electricity tax is reduced to the minimum allowed. This continues to lower the electricity bill through taxes. On the other hand, the maximum price of the butane cylinder is frozen.

Limit on rentals

The Government has carried out the extension until December 31 of the 2% limit in the annual rent update. Thus, in updating the annual price of a lease, even if it is agreed that this is set based on the consumer price index (CPI), it can only be raised up to 2%. Likewise, tenants whose contract ends between January 1 and June 30 may extend it for another six months under the same conditions. This prevents them from having to sign a new contract in which the landlord can freely raise the price.

Measures for vulnerable households

On the other hand, the Council of Ministers has given the green light to various measures to help vulnerable households: the suspension of evictions and evictions for these families is extended for six months, the cutting of essential supplies is prohibited during 2023 and the social bonus. In addition, the 15% increase in the minimum vital income and non-contributory pensions is maintained.

Aid for farmers

For farmers, the Government will dedicate 300 million in direct aid to offset the increase in production costs due to the increase in the cost of fertilizers. The Executive, said Sánchez, “will monitor” that all this aid is transferred correctly to the price of food. That is, distributors will be prevented from being left with a higher margin by maintaining the prices of products that, in theory, should become cheaper.

fuel bonus

In this case, the Council of Ministers has abolished the general aid of 20 cents per liter of fuel. However, it does maintain the fuel bonus for professional road transport, farmers, shipping companies and fishermen. In this case, the amount will not be reduced each time it is refueled, but rather it will be paid at the end of each month together with the monthly payments for the so-called professional diesel. In this way, all individuals who received a subsidy of 20 cents per liter each time they refueled are left out. Farmers will also receive other aid here, up to 20 cents per liter, through the refund of the special hydrocarbons tax. It has a cost of 240 million euros. While for fishermen, the aid will cost 120 million euros.

Support for the gas-intensive industry

To help the industry that needs gas to carry out its work, a new liquidity line from the Official Credit Institute (ICO) of 500 million euros has been opened. In addition, the Government has carried out aid for the ceramics sector and other subsectors for another 450 million euros. And remember that the new PERTE for industrial decarbonization has been endowed with 3,100 million in community investment (1,500 million in financing and 1,600 million in subsidies).

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