Spain: The new tax on plastic and the drop in production annul the VAT reduction on olive oil

Published 2023년 1월 10일

Tridge summary

The price of olive oil in Spain rose by 40% in 2022 due to heat waves, droughts, and increased production costs. In response, the Government reduced the VAT from 10% to 5%, but a new tax on plastics in 2023 is expected to cancel the VAT reduction for consumers, costing the agri-food industry 690 million euros. Producers are seeking measures to regulate the market and cover production costs, as the lack of supply continues to drive up prices, despite a 30% decrease in demand. The National Association of Edible Oil Industrialists, Packers and Refiners views the new plastic tax as an additional economic burden on consumers.

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Original content

Heat waves, droughts and an increase in production costs have caused the price of olive oil to have closed 2022 at maximums with an increase of 40%. For this reason, the Government promoted a reduction in VAT from 10% to 5%. The problem is that in 2023 the new tax on plastics has arrived, which represents an estimated cost for the entire Spanish agri-food industry of 690 million euros. This will be reflected in the cost, so that this tax reduction will be canceled for the consumer by the other tax. Meanwhile, the Government will collect the same. The lack of supply means that prices continue to rise, despite the fact that demand has fallen by 30% in the last year. Producers demand measures to regulate the market and cover production costs so that the consumer receives the product at an affordable price. This directly affects the producer. "In the last year the price of extra virgin has risen from 3.80 to 5 euros, but even so it does not cover production costs, we must make that ...

Source: Cope