‘Zero VAT’ essential foods basket comes into effect on April 18

Plant-based milks added to the government’s list of essential food products

Dozens of essential food products will become cheaper starting on April 18 when the government’s ‘Zero VAT’ (IVA Zero) measure will officially come into effect.

The measure, which will reduce the VAT charged on food products considered “essential” to 0%, will run until at least October 31.

The announcement came after the MPs from the Parliamentary Commission of Budgeting and Finances approved several changes to the government’s original ‘Zero VAT’ proposal on Tuesday.

The biggest change has been the addition of a series of plant-based milks to the essential food product package.

Two proposals by Bloco de Esquerda and PAN were approved to add “vegetable-based drinks and yoghurts, with no milk and produced from dried fruits, cereals, fruits and vegetables” to the list.

Changes have also been made to specify the types of cow’s milk which will benefit from this new regime: organic, sterilised, pasteurised, ultra pasteurised, fermented and powdered.

Gluten-free products for people with celiac disease, and enteral nutrition products (types of liquid food mixture delivered by a tube into the stomach) have also been added to the list.

The original list of products included in the package was: bread, potatoes, pasta, rice, onions, tomatoes, cauliflower, lettuce, broccoli, carrots, courgette, leeks, pumpkin, turnip greens, ‘Portuguese cabbage’, spinach, turnip, apples, bananas, oranges, pears, melon, red beans, black-eyed peas, chickpeas, peas, cow’s milk, yoghurts, cheese, pork, chicken, turkey, beef, codfish, sardines, hake, mackerel, canned tuna, seabream, horse mackerel, chicken eggs, olive oil, vegetable oil, and butter.

Some products which had been suggested by other political parties and associations have been left off of the final list, such as gluten or lactose-free products, tofu and lentils.

Before the ‘Zero VAT’ measure is enacted, however, it will still have to be approved in a final voting in Parliament on Thursday (which should be a formality) and be promulgated by President of the Republic, Marcelo Rebelo de Sousa.

The government proposed a series of measures last month to address the rising cost of living in Portugal, having signed a pact with the food production and distribution sectors to ensure that the ‘Zero VAT’ measure will be reflected on prices charged to consumers.

Finance Minister Fernando Medina believes that the measure will help families save around €12 when purchasing €200-worth of essential food products.

Hopes are that it will succeed unlike a similar 0% VAT scheme introduced in Spain at the start of the year.

However, the list of products included was much smaller (just 11) in Spain, and certain items such as pasta and olive oil, which will become exempt from VAT in Portugal, saw their VAT rates reduced from 10% to just 5%.

The government’s proposal has received criticism from other parties. Duarte Pacheco, MP for PSD, said that it has “many inconsistencies”.

“The State is now defining what people should or shouldn’t eat,” he said, pointing out how the government’s list includes melons but not watermelons. “If we started expanding on this, we would include watermelons but leave out another national product.”

By Michael Bruxo
[email protected]