MADRID (AP) — Spain will temporarily abolish sales taxes on olive oil to help consumers cope with skyrocketing prices, the government said Tuesday.
Spain is the world’s largest producer and exporter of olive oil, but costs for domestic consumers have risen dramatically due to global inflationary pressures and a prolonged drought that has decimated supplies. Prices have also risen enormously in other Mediterranean countries.
According to the Spanish Ministry of Agriculture, the price of olive oil has increased by 272% since September 2020. A five-liter bottle of olive oil can cost more than 50 euros in a Spanish supermarket.
Spaniards use olive oil for cooking and to garnish sandwiches, salads, vegetables and other dishes. According to the Ministry of Agriculture, Spanish households consumed an average of 6 liters per person last year, compared to 0.4 liters for international consumers. But due to the price increase, there has been some switch to cheaper cooking oil.
The government had already reduced the sales tax on olive oil from 10% to 5% as part of an anti-inflation package.
From July to September there is no sales tax on olive oil. This will be taxed at 2% until the end of the year. From then on, it is taxed at 4% and is considered a staple food.
Spanish Finance Minister María Jesús Montero said the decision “reflects the importance of olive oil in the Mediterranean diet and a healthy lifestyle.”
