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Spain eliminates sales tax on olive oil to help consumers cope with skyrocketing prices

June 25, 2024
in Business
Spain eliminates sales tax on olive oil to help consumers cope with skyrocketing prices
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The Associated Press

Published Jun 25, 2024  •  1 minute read

MADRID (AP) — Spain will temporarily eliminate the sales tax on olive oil to help consumers cope with skyrocketing prices, the government said Tuesday.

Spain is the world’s leading producer and exporter of olive oil, but its cost for domestic consumers has risen dramatically due to global inflationary pressures and a prolonged drought that decimated supplies. Prices have also surged in other Mediterranean countries.

The price of olive oil has increased by 272% since September 2020, according to Spain’s agriculture ministry. A five-liter bottle of olive oil can cost over 50 euros ($53) at a Spanish supermarket.

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Spaniards use olive oil to cook and to garnish sandwiches, salads, vegetables and other dishes. Last year Spanish households consumed on average 6 liters per person, compared to 0.4 liters for international consumers, according to the agriculture ministry. But the rise in prices has made some switch to cheaper cooking oils.

The government had already slashed the sales tax on olive oil from 10% to 5% as part of an anti-inflation package.

No sales tax will be applied to olive oil from July through September, when it will be taxed at 2% until the end of the year. From then on, it will be taxed at 4% and be considered a basic food stuff.

Spanish Treasury Minister Maria Jesus Montero said the decision reflects “the importance of olive oil in the Mediterranean diet and a healthy lifestyle.”

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