The Portuguese government plans to suspend the collection of value added tax (VAT) on the purchase of 44 basic foodstuffs for six months, in order to curb high inflation, announced Prime Minister Antonio Costa.
"The suspension of collection is an integral part of the agreement signed by the government with producers and traders, and its aim is to stabilize prices," said Costa.
The agreement also includes financial support for farmers and herders in the amount of 600 million euros, reports SEEbiz.
The government will suspend the collection of VAT on bread, pasta, rice, milk, eggs, yogurt, cheese, vegetable oil, butter, meat and fish for six months, with the possibility of an extension.
The VAT rate for basic foodstuffs is six percent.
The proposals must be adopted by the parliament in which Costa's government has a majority.
Inflation in Portugal reached 8,2 percent in February and is 0,3 percentage points lower than in the Eurozone. However, food prices have recently increased by more than 20 percent.
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