From the July 1st olive oil in Spain will be exempt fromVAT, joining the group of other foods considered essential. This was announced by the Spanish government, as reported by the national press.
The objective of this temporary measure is to «protect and encourage the consumption of olive oil, a healthy product whose price has recently increased due, among other things, to drought,” said the Ministry of Finance.
According to official data, a May olive oil in Spain was more expensive than 62.8% compared to the previous year and increased by 198.5% from January 2021.
In the 2023the Spanish government had already lowered the VAT on olive oil from 10% to 5% and was expected to be reduced to 0%.
Olive oil thus joins the group of foods considered essentialsuch as bread, eggs, vegetables and fruit, which they have in Spain reset VAT from January 2023 in response to inflation.
Spain has adopted measures to respond to the increase in prices after having recorded one of the highest values in the European Union in the first half of 2022 and in July of the same year having recorded the highest inflation in the country since 1984 (10.77%).
Spain is the largest producer of olive oil in the world and the second with the highest “per capita” consumption after Greece and official estimates are that production in the 2023/2024 campaign, which began last October, will again be historically low, due to drought.
According to provisional estimates of Ministry of Agriculture at the beginning of the campaign, olive oil production in 2023/2024 should be limited to 765,300 tons15% more than the previous campaign, but 34% lower than the average of the last four seasons.
Olive oil production in Spain represents the 70% of European Union production and 45% of global production.
More than 350,000 farmers cultivate olive groves in the country and the sector provides 15,000 jobs.
Again according to the same government data, olive groves in Spain cover 2.75 million hectareswith 80% of production concentrated in Andalusia, in the south of the country.
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