Spanish PM proposes extension of VAT reduction on basic foods

Consumers currently pay no VAT on bread, milk, fruits, and vegetables, while other items have it reduced

Spanish PM Pedro Sánchez in Congress
Spanish PM Pedro Sánchez in Congress / Juan Carlos Rojas
Catalan News

Catalan News | @catalannews | Barcelona

June 12, 2024 11:27 AM

June 12, 2024 12:19 PM

Spanish PM Pedro Sánchez announced on Wednesday his intention to extend the current VAT reduction on certain basic foods, which was due to expire on June 30. 

"We have to propose this to Congress. Although this government has a parliamentary minority, the prices of basic foods continue to rise, so we have to make this effort, which is important for public finances," he said in an interview with public broadcaster TVE. 

Currently, some basic food items, such as bread, milk, fruit and vegetables, are exempt from VAT, which was previously taxed at 4%

Other food items, such as olive oil and fresh pasta, are subject to a reduced VAT, from 10% to 5%. 

The measure, which came into effect in January 2023 and will expire at the end of the month, was the most prominent of the anti-crisis package approved by the Spanish government at the end of 2022. 

All non-essential food products are currently taxed at 10% while VAT on drinks with sugar and sweeteners and alcoholic beverages is 21%.

Renewal of Spain's top judicial body

Pedro Sánchez issued an ultimatum to the conservative People's Party on the renewal of Spain's top judicial body, the General Council of the Judiciary (CGPJ).

"If in June the PP continues with the blockade, the negotiations will be over, and the Socialists and Sumar will present a proposal to unblock this absolutely unacceptable situation," said.

The CGPJ has been expired for five years because the Socialists and the PP, the only parties with the necessary parliamentary majorities, have not been able to reach an agreement to renew it. 

"The Groundhog Day has lasted too long, more than 2,000 days, and that's over," Sánchez said. 

If the Socialists and PP fail to reach an agreement, Sánchez has suggested that he will amend the Organic Law of the Judiciary to break the deadlock. Sánchez may try to adjust the CGPJ's power to appoint judges to higher courts.

"We have accepted all the mediations proposed by the PP. As a government, we give ourselves until the end of the month, and if they do not unblock this situation, we will respond," he said.