There's news going around which at first glance appears a bit contradictory concerning the IVA charged on olive oil, speaking of both 4% and also of zero percent.

So, let’s clarify, in 2023 the Government dropped the IVA on olive oil down to 5% from 10%. This was an anti-crisis move.

They then decided that it would be at the minimum rate (superreducido) charged at 4% which corresponds to the prime-necessities along with bread, eggs, milk and fruit, which will be applied from the 1st of July.

However, the Board of Ministers will eliminate completely the IVA on the said oil, come next Tuesday as a provisional measure. This is because the price of olive oil has tripled since 2021 – an increase of just over 200%.

So, in effect, the IVA levied on olive oil will be officially 4% as a permanent measure, but from Tuesday the Government will suspend IVA all together on this product and as temporary measure. That is to say, that when this temporarily measure ends, the price will be 4%.

The farmer’s union, GOAG, wants the Government to keep an eye on supermarkets to make sure that they don’t put the base price up to cover the missing IVA; i.e., it will end up costing the consumer the same.

Editorial comment: this happened when the Government applied a subsidy of a few cents a litre on fuel to bring the price down, but the gasoline distributor companies put the price up by virtually the same amount as the government discount leaving the price at the pumps the same, if not more expensive.

(News: Spain)