Spain announces plan to eliminate sales tax on olive oil
Date
6/26/2024 8:19:56 AM
(MENAFN) Spain has announced that it will eliminate the sales tax on olive oil, a staple of Spanish cuisine, following a massive price increase in recent years. The price of a liter of generic extra virgin olive oil in supermarkets has surged from €3.45 (USD3.70) in February 2021 to €9.46, according to data from a Spanish broadcaster. The removal of the 5 percent sales tax is expected to lower the price by approximately €0.50 per liter, providing some relief to consumers.
The National Statistics Institute reported that olive oil has experienced the largest price increase of any product tracked over the past year, with a 63 percent spike. Several factors have contributed to this dramatic rise, including years of severe drought in many of Spain's olive oil-producing regions, as well as increased costs for energy and other production-related components. These challenges have significantly impacted the supply and pricing of this essential product.
Spain, one of the world's leading olive oil producers, saw a 34 percent drop in production last season compared to the four-year average, as per forecasts from the Agriculture Ministry. However, a rainy spring has brought optimism, with experts predicting that olive oil production in Spain will return to normal levels for the upcoming season.
The new government measure will permanently classify olive oil as a basic food staple, alongside bread, eggs, milk, and produce. The elimination of the sales tax will begin on July 1 and will remain in effect until October. This move follows the Spanish government's decision in late 2022 to cut sales tax on all basic foodstuffs from 4 percent to 0 percent to combat inflation, a measure that has now been extended until October, as announced on Tuesday.
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