On January 1, the Government launched an anti-crisis measure to lower VAT on some essential foods. The idea was to alleviate the effects of runaway inflation that has caused families to lose purchasing power while wages remain stagnant. However, another fiscal measure launched that same day went unnoticed: the plastic tax.
Many of those foods that now enjoy the VAT reduction such as milk, fruit and vegetables, oil or pasta are also affected by this new tax. In short, the Government has wanted one measure to counteract the other and compensate it. Let’s see how it affects the consumer and businesses.
The plastic tax. This new tax was approved in April of last year as part of the Law on Waste and Contaminated Soils and is the only tax of its kind in Europe, since Italy postponed the approval of its own. It basically falls on non-reusable containers that contain plastic. Therefore, it affects all types of single-use products designed to “contain, protect, handle, distribute and present merchandise”. That is, containers, packaging tapes and films.
This means that as of January 1, both food manufacturers and distributors have to pay 0.45 cents per kilogram of this material. Although the containers of medicines, sanitary products, food for special medical purposes, infant formula or hazardous waste of sanitary origin are exempt.
Why? To promote a circular economy and end single-use plastics as the EU has established. We must bear in mind that almost all the products we buy in the supermarket contain plastics: yogurt, legumes, pizzas, sugar, rice, and even some fruits. In Spain, the Government is going to stop collecting 661 million euros with its VAT reduction measure, yes, but with the new tax on plastic, it could collect close to 690 million euros. This would offset the expense: it goes down for VAT and goes up for plastic.
Who has to pay it? In principle, the new tribute is aimed at producers, distributors and large surfaces. But there are businesses that will be exempt from implementing this new measure in their establishments. Specifically, small neighborhood stores and supermarkets, establishments and surfaces that do not exceed 400 square meters. And here comes the most important point: although the Government has said that “the consumer does not have to be affected”, that is not entirely true.
If the distributors decide to pass on the cost of the tax on the prices of the products, the customer’s pocket could suffer. Sedas, the Spanish association of distributors, supermarkets and supermarkets, has already assured that this tax will affect operators and will have repercussions on prices. And Acoplasticos reported that “the tax will inevitably impact the final price of the products that are sold in small packages and will rise up to 7%”.
A bad year for the pocket. As we have told Magnet repeatedly in other articles, 2022 has been a disastrous year for the pockets of the Spanish. Not only have they seen their purchasing power diminish due to skyrocketing inflation, but they have also seen their salaries stagnate despite the rise in prices. This has caused them to reduce their annual shopping basket by 9% since last year, because the average price of food has climbed up to 15.3%. Going to the supermarket has literally become unsustainable for many households.
Image: Mercadona