Madrid (EFE).- The Government will eliminate the temporary VAT reduction on food if underlying inflation (without energy or unprocessed food) falls below 5.5%, a clause already introduced in the decree law of last December in the one in which this measure was adopted, which has now been extended for another six months.
The Ministry of Economic Affairs has confirmed to EFE that the decree law approved this Tuesday in the Council of Ministers, and which will soon be published in the Official State Gazette (BOE), maintains this condition that would end the abolition of VAT on food basic necessities and with a 5% reduction in VAT applied to oils and pastes.
The measure would be lifted on November 1 in accordance with the underlying inflation data for September, while in the previous decree it was expected to be lifted on May 1 in view of the March data.
Core inflation, which has been higher than the general rate since December, has slowed since it reached its all-time high of 7.6% year-on-year in February.
In March it moderated to 7.5%; in April, 6.6%; and in May, at 6.1%.