In February, the Ministry of Consumer Affairs launched an investigation into major retail distributors to ensure they were passing on the VAT reduction to consumers. The investigation is ongoing, with some chains requesting an extension of the deadline provided by the Ministry. Meanwhile, the National Commission of Markets and Competition (CNMC) is also monitoring supermarkets to ensure compliance with the measure.
A report published in July 2023 confirmed that distribution chains were correctly passing on the VAT reduction to consumers. However, supermarkets have requested more time from the Government to prove that they are not exploiting the tax reduction on food to increase their profit margins, which is prohibited in the anti-crisis decree. The temporary measure was implemented to curb inflation.
The food industry is now preparing to ask the Government for an extension of the VAT reduction on basic products beyond its expiration date in June. They want the reduction to remain in place until the end of the year and are advocating for an expanded list of affected products, including essential items like meat and fish. The industry hopes for political stability to expedite processing relevant bills.
Overall, both supermarkets and the food industry are closely monitored by various government agencies and regulatory bodies to ensure compliance with anti-crisis measures aimed at mitigating rising prices for consumers.
