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Extension of Tax Exemption on Essential Food Items

Updated: Sep 9, 2023

Today, the Council of Ministers is set to approve the extension of the zero VAT rate on certain food products, as confirmed by António Costa, until the end of the year.
A mart with full of essential food items
Food Mart

António Costa announced that due to the success of the measure, which was originally scheduled to conclude in October, the Council of Ministers will instead approve an extension of the zero VAT reduction until December 31st. This extension aims to ensure the ongoing affordability of essential food items for Portuguese families.

In April, a significant policy change took effect in Portugal, marked by a reduction in the value-added tax (VAT) rate on a specific category of 46 essential food products from 6% to 0%. This strategic move was implemented with the aim of addressing the needs of the populace, particularly in terms of food affordability and accessibility. Over the intervening months, the impact of this measure has been notably positive, demonstrating its efficacy in providing relief to households facing economic challenges. Consequently, in light of this success and its benefits for the Portuguese population, Prime Minister António Costa has announced that the Council of Ministers is poised to endorse an extension of the zero VAT rate on these essential food items. Originally set to conclude in October, this extension will now carry through until December 31st, offering continued support in controlling the prices of fundamental food staples for families across the country. This decision reflects the government's commitment to ensuring that essential food products remain accessible and affordable, contributing to the well-being of Portuguese households.

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