From today, Sunday 1st January, the measures of the third “anti-crisis plan” to deal with the effects of the war in Ukraine and inflation come into force, which were announced by the Government on Tuesday. This third plan has a budget of 10 billion euros and takes the total spent by the Government to support people to 45 billion.
IGIC ON FOOD:
One of the biggest concerns of households in recent months has been the increase in food prices as well as energy prices, which have now exceeded 15%. To alleviate this, a reduction in IGIC has been established from January to June, during which time this tax will be eliminated from basic necessities, currently taxed at 4%.
This means that the VAT on bread, flour, milk, cheese, eggs, fruits, vegetables, potatoes, and cereals is reduced to zero, and the VAT on cooking oils and pasta are reduced from 10% to 5%. Other products taxed at 10%, such as fish or meat, are not included in the plan.
This reduction will be automatically eliminated if underlying inflation, which excludes unprocessed food and energy product, falls below 5.5%. It currently stands at 6.3%.
200 EURO AID CHEQUE:
The decree also includes an aid cheque of 200 euros for the 4.2 million families that the Government estimates earn less than 27,000 euros per year, and have assets of less than 75,000 euros.
RENTAL CONTRACTS:
The 2% limit to the increase in rental prices in the annual update is renewed until 31st December 2023, when the contracts are linked to the IPC (Cost Of Living). In addition, an extension of six months is enabled for rentals that end before June 30th, to prevent landlords from triggering the price in their new contracts.
In addition, several measures promoted in the latest royal decree-laws within the so-called "social shield" are also extended until June 30th, such as the prohibition of evictions or the launching of homes for vulnerable families.
GOODBYE TO 20 CENTS DISCOUNT ON FUELS:
As of today (Sunday), the 20 cents discount on a litre of fuel is eliminated for most people. The state aid will only continue for the sectors most affected by the crisis, such as transport companies, farmers, and shipping companies.
The Ministry of Transport have detailed the bonus for these sectors, which will be divided into two phases:
- a discount of 20 cents per litre consumed between January 1st and March 31st.
- and 10 cents between April 1st and June 30th.
This aid will be paid at the end of each month. In the case of farmers, it will be done by refunding the special hydrocarbon tax.
