Spain to remove sales tax on olive oil

Credit: Bryan Allison, Flickr

Spain has announced a bold step to support consumers by eliminating the sales tax on olive oil.

This action is a response to a dramatic 272 per cent increase in olive oil prices since September 2020, as reported by Spain’s agriculture ministry. The initiative aims to alleviate the financial strain on households struggling with increasing food costs.

Tax Reductions as Anti-Inflation Measure

Spain, the world’s largest producer and exporter of olive oil, faces an unprecedented price rise exacerbated by global inflation and a severe drought that devastated olive crops.

The cost of a five-litre bottle now exceeds €50 in supermarkets across the country, prompting concerns over affordability and dietary shifts among consumers.

The government had previously reduced the sales tax from 10 per cent to 5 per cent as part of broader anti-inflation measures.

With no sales tax on olive oil until September, policymakers expect to stabilise prices and ensure continued access to this essential Mediterranean product.

According to the Spanish Treasury Minister María Jesús Montero, the government’s action emphasises “the importance of olive oil in the Mediterranean diet and a healthy lifestyle.”

Regional and Global Implications

This move aligns with efforts in neighbouring Mediterranean countries, such as Greece and Italy, facing similar challenges in olive oil affordability and consumption patterns.

The decision is expected to provide relief to Spanish residents and safeguard cultural and dietary practices connected to olive oil consumption, a pillar of Spanish cuisine and identity.

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Written by

Talyta Franca

Talyta Franca, Class 2026, Northwestern University in Qatar.