- Measures The Government leaves basic food without VAT and grants a check for 200 euros to low-income families
The President of the Government, Pedro Sánchez, announced yesterday the new package of measures against inflation, which will come into force next year and among which two stand out in particular: a check for 200 euros for vulnerable families, and VAT reduction to staple foods, oil and pasta.
In the first case, the targeted check is aimed at families with incomes of less than 27,000 euros and whose assets do not exceed 75,000 euros, excluding the habitual residence. Moncloa sources add that they will benefit 4.2 million families, and from the Ministry of Finance they explain that the process will be as follows. Families must complete, through the Tax Agency, the request for 200 euros. Next, the agency headed by Soledad Fernández will verify that the applicants do indeed meet the established requirements, and once the verification is complete families will receive the income in their account.
In the department of Mara Jess Montero they add that the application period begin next February 15 and close on March 31. The process, therefore, is very similar to the one followed with the previous 200-euro check that was already approved in September for families with incomes of less than 14,000 euros. On that occasion, the beneficiaries began to collect the benefit around two months after making their request, which may be a reference period for the current aid.
As for the VAT reduction, the measure is divided into two sections. Staple foods will go from being taxed with 4% to not having VAT. be 0%. Here are common bread, as well as frozen common bread dough; bread-making flours; milk produced by any animal species: natural, certified, pasteurized, concentrated, skimmed, sterilized, UHT, evaporated and powdered; cheeses and eggs; fruits, vegetables, vegetables, legumes, tubers and cereals.
Likewise, the Value Added Tax applied to oil and paste will be reduced from the current 10% to 5%. The small print of the reference of the Council of Ministers indicates that the reduction will be maintained until June 30 or until underlying inflation falls below 5.5%.
The Executive’s measure also occurs after the price of oil has skyrocketed by 31.5% during the year, while that of pasta has risen by 21%. Milk has also registered a strong increase in cost of 30%, according to the INE, while eggs have risen by 27%, potatoes by 21% and cereals by 22%.
The government decision is very similar to what the Popular Party requested already in September, and he stressed again just a month and a half ago, and that the Executive had totally ignored to date. The associations that represent the mass consumption value chain had also been requesting a measure in this sense for some time, although yesterday they regretted that fresh products have been excluded from this tax reduction, as they emphasize that items such as meat, fish or Yoghurts are part of the basic basket of consumers and are also essential in the Mediterranean diet.
Another very relevant action is that the Government will also restrict the discount of 20 cents for fuel. It will limit it for farmers, carriers, shipping companies, ships, according to Sánchez. And here, too, there is fine print. The most important one is that for carriers that use professional diesel, an aid of 20 cents is established for three months and of 10 cents for an additional period of three months which will be managed as a monthly return by the Tax Agency. This was not announced by the president.
In any case, it is an action focused, which is what the Bank of Spain demanded last week when it again denounced that universal fuel aid was regressive since it largely benefited the highest incomes. Also within this greater focus, the check for vulnerable families could be framed, and Fedea has pointed out on more than one occasion that this action would be beneficial.
The Government will also subsidize 30% of urban and interurban public transport, but only in those communities and town halls that subsidize, in turn, 20% of the price. This will force regions such as the Community of Madrid, which at some point have expressed doubts about the continuity of the measure, to make a decision.
Sánchez also explained that the limitation to 2% of the increase in the rental price for all of 2023, and an extraordinary extension of the current conditions of rental contracts of up to six months is also introduced. The suspension of eviction proceedings is also extended until June 30, the document of the Council of Ministers includes.
On the electricity bill, the reduction in VAT on electricity and the excise tax on electricity is extended throughout 2023, and with regard to gas, a VAT rate of 5% will be applied to all components of the bill. This will extend to briquettes, pellets from biomass or wood for firewood used as fuel in heating systems, they explain in the Treasury.
In addition, the surgical masks During the first semester of 2023, they will maintain a VAT of 4% due to their obligatory nature in public transport and other areas, while diagnostic tests and vaccines will continue at 0%.
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