Lower value-added tax rates on a series of commodities will start applying as of Monday, at a cost of 441 million euros.
Although rate changes usually apply from the start of a month, the government has opted to introduce the lower brackets for a number of commodities less than a week before European, regional and local elections. Among the products moved from the 24-percent bracket to the 13-percent one are olive oil, meat and fish, cocoa, vinegar and generally standardized non-fresh food.
Services that are dropping from the higher to the medium VAT rate include food service, such as restaurants, cafeterias, pastry shops, etc, with the exception of nightclubs. Also excluded from the reduction are all sorts of drinks, from coffee and refreshments to alcoholic beverages, which will remain in the 24 percent bracket. Other services to enjoy a VAT rate cut are electricity and natural gas, and institutions for people with disabilities, mental illnesses and drug addictions.
However the government is considering technical amendments to the bill tabled on Monday, as beverages which carry a medium rate as an ingredient will be in the top bracket when served.