Portugal’s left-wing government wants to temporarily abolish VAT on 44 basic foodstuffs to combat high inflation. This step is part of an agreement with manufacturers and retailers. The package of measures will cost the state about 600 million euros.
The suspension of VAT on foods such as bread, pasta, rice, cow’s milk, eggs, yoghurt, cheese, oil, butter, meat and fish should initially apply for six months and be extended if necessary, Prime Minister António Costa said. The package of measures must be approved by parliament. But the government has a majority there.
Groceries recently 20% more expensive
Inflation in Portugal was 8.2 percent in February. The price of food was recently even 20.1 percent. The sales tax on most groceries is six percent.
Costa attributed the strong inflation mainly to the Russian offensive war in Ukraine. He warned that it cannot be ruled out that the price increase will not continue after the package of measures has entered into force. “No one knows how long this war will last, and as long as it lasts there is a risk that production costs will continue to rise,” he said in Lisbon on Monday evening.
Source: Krone
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