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COST OF LIVING

Which food items will be cheaper in Spain after VAT cut?

The Spanish government recently announced a new package of measures to help with the rising cost of living, including cutting the VAT on basic food products.

Which food items will be cheaper in Spain after VAT cut?
Which food items will be cheaper in Spain in 2023? Photo: GABRIEL BOUYS / AFP

The new package was announced on Tuesday December 27th at a news conference by Spanish Prime Minister Pedro Sánchez to help fight the effects of rising inflation and the spiralling cost of goods due to the war in Ukraine.

“For six months, we will reduce VAT on all basic foods from 4.0 percent to 0.0 percent,” Sánchez said.

This new measure will come into force on January 1st 2023, meaning that in the new year, we should be paying less for our groceries for the next six months.

The full list of food items that will now have their VAT reduced from 4 to 0 percent are:

  • Cereals
  • Bead
  • Flour
  • Milk
  • Eggs
  • Vegetables
  • Legumes
  • Cheese
  • Fruit

Oil and pasta will also be getting cheaper as they will have a VAT reduction from 10 to 5 percent, Sánchez confirmed. 

Unfortunately, meat and fish will continue to have 10 percent of value added tax, the two big absentees on the list.

Overall, the VAT slash means that people will now be able to save around five percent when they go shopping for food staples.

There is also concern that supermarkets bosses will benefit from the VAT cut but raise prices to continue making a profit. The following tweet includes a thread with images of all the products that should become cheaper come January 1st (current prices showing), which you can use to compare if they’ve actually dropped in price for consumers.

According to the latest data provided by Spain’s National Statistics Institute (INE), the rising cost of living has affected eight out of ten products, making them 10 percent more expensive on average.

When it comes to food products, all of them are more expensive today than they were a year ago, but it’s the basic items that have increased the most.

Out of the list of food items that will now have reduced VAT, the price of flour and cereals have risen the most. According to the INE, these have risen by 37.6 percent compared with last year.

Milk has increased by 31 percent, eggs by 27.1 percent and olive oil by 25.9 percent.

While the reduction in VAT will not make up for the amount prices surged by, it will still be able to help people in Spain save small amounts where they can.

The plan was announced as part of a raft of new measures including a €200 handout for vulnerable families who earn less than €27,000 per year.

READ ALSO: How to get Spain’s €200 cost-of-living subsidy

Other ways that the Spanish government has helped people through the cost-of-living crisis include offering free or reduced transport tickets, limiting the amount that landlords can increase the rent by and giving benefits to those struggling to pay their variable mortgages.

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ECONOMY

REVEALED: Where are Spain’s poorest neighbourhoods?

Data from Spain’s National Statistics Institute (INE) has revealed the two poorest neighbourhoods in Spain, where inhabitants earn the lowest amount of income in the country.

REVEALED: Where are Spain's poorest neighbourhoods?

The report showed that the four poorest neighbourhoods in Spain can all be found in the cities of Seville and Alicante.

The barrios (neighbourhoods) are Polígono Sur and Los Pajaritos y Amate in Seville and Juan XXIII in Alicante.  

Those in Seville’s Polígono Sur earned the least amount with an average of just €5,666 per year. In fact, other areas in both Seville and Alicante appeared again on the list of the ten next poorest neighborhoods in the country with those in Seville being listed six times out of the top 15. 

All but four of the poorest ones were located in Andalusia, with the others are found in Alicante, Madrid and Murcia. 

This is the complete list of the 15 neighbourhoods with the lowest income per capita in Spain, according to the latest available data, collected in 2019:

  • Polígono Sur (Seville) – €5,666 
  • Los Pajaritos y Amate (Sevilla) – €6,042
  • Juan XXIII (Alicante) – €6,272
  • Torreblanca (Seville) – €6,801
  • San Cristóbal (Madrid) – €6,955
  • Azahara-Palmeras (Córdoba) – €7,361 
  • Polígono del Guadalquivir (Córdoba) – €7,380
  • Alicante Distrito 5A (Alicante) – €7,425
  • Palma-Palmilla (Málaga) – €7,683
  • Palmete-Padre Pío (Seville) – €7,724
  • Sector Sur (Córdoba) – €8,100
  • Olivia-Letanías (Seville) – €8.111
  • Norte-Bazorla-Villegas (Seville) – €8,112
  • Murcia Distrito 8 (Murcia) – €8,385
  • Moreras-Huerta de la Reina (Córdoba) – €8,556

Sevillian towns such as Los Palacios – Villafranca and Lebrija and Alicante towns such as Torrevieja and Crevillente were also included in the top 20 poorest places with over 20,000 inhabitants. 

Interestingly, both provinces are among those that received the least investment in infrastructure from the General State Budget (PGE) between 1985 and 2018, according to a list of the Independent Authority for Fiscal Responsibility (AIReF), which takes into account the number of inhabitants for its calculation.

This may be about to change in Seville capital, however, which has received investments for the SE-40 ring road, the Centennial bridge and metro line 3 as part of the 2023 State Budget.

No extra investments have been given out to Alicante though, which “has one of the lowest per capita incomes in Spain, occupying position 44 out of 52,” the document stated. In terms of investment, the Alicante province receives less than de €85.40 per inhabitant. 

“This investment places us in the last place of investments per inhabitant, far from the penultimate province, which is Jaén with €110 per inhabitant,” residents of Alicante complained.  

The correlation between low investment and poor towns also occurs in Andalusian provinces such as Cádiz and Huelva, which are also among those that have received the least investment in infrastructure from the PGE between 1985 and 2018, according to AIReF. 

Towns in Cádiz and Huelva are also among the INE’s list of places with the poorest neighbourhoods, in addition to Almería, which received a mediocre amount of investment.

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