Spain Temporarily Axes Olive Oil Sales Tax amid Soaring Prices

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In a bid to cushion the economic hardships of its citizens, the Spanish government has announced plans to temporarily scrap the sales tax on olive oil, a staple in every Spanish kitchen. The move comes in response to soaring prices that have hit the country’s most beloved commodity, thanks to global inflation and an extended drought which has constrained supplies.

Spain, recognized globally as the chief producer and exporter of olive oil, has witnessed an alarming surge in domestic prices. The country’s citizens, already grappling with increased costs of living, now face the daunting task of affording this vital culinary ingredient, whose prices have soared by 272% since September 2020, as per data from Spain’s Agriculture Ministry. Notably, a five-liter bottle of olive oil, which ordinarily graces every Spanish dining table, can now set a consumer back by over 50 euros ($53) in local supermarkets.

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Olive oil enjoys a near iconic status in Spain, where it’s not just a cooking oil but a fundamental element of the local gastronomy. It lends its rich, golden touch to everything, from garnishing sandwiches and salads to sautéing vegetables and other dishes. Last year’s figures from the country’s Agriculture Ministry reveal that average olive oil consumption per Spanish household stood at six liters per person, a marked contrast to international consumers who consume a mere 0.4 liters. However, this surge in prices has nudged many Spaniards towards the regrettable alternative of opting for cheaper cooking oils.

Prior to this, the government had attempted to stem the upward trajectory of olive oil prices by slashing the sales tax from 10% to 5% as part of a broader strategy to combat inflation.

In the new provisions, olive oil will become tax-free from July through September. After this grace period, it will bear a nominal tax of 2% till the end of the year. As the new year commences, it will be taxed at 4% and henceforth considered a basic foodstuff, a testament not only to its vital role in Spanish kitchens, but also in the country’s cultural cuisine.

Expressing her thoughts about this move, María Jesús Montero, the Spanish Treasury Minister, articulated that the decision stood as a testimony to “the importance of olive oil in the Mediterranean diet and a healthy lifestyle.” With these measures, she signals the Spanish government’s commitment to maintaining the centrality of beloved local food traditions in the face of economic trials.