The Spanish government states that the VAT reductions and financial support to farmers must be directly and immediately passed on as a reduction in food prices. Additionally, pensions and minimum wages will be significantly increased.
The temporary abolition of VAT targets basic food items such as bread, bread flour, milk, cheese, eggs, fruit, vegetables, legumes, potatoes, and grains. Fish and meat products were excluded from the tax reductions.
The government will also maintain a six-month extension of the electricity tax reduction, from 10% to 5%, and will issue a new check of 200 euros for families earning less than 27,000 euros per year. The Prime Minister said that the check would benefit 4.2 million households.
Furthermore, the government extended the suspension of evictions of Spaniards who can no longer pay their rent. This measure has been in place since the COVID-19 pandemic.
The government also maintained free commuting and short-distance train travel for all of 2023. It added medium-distance city bus transport to the package. Fuel discounts for truck drivers are also set to continue.
Prime Minister Sánchez stated that the support measures adopted since February would cost the Spanish treasury approximately 45 billion euros, including 10 billion euros for the latest series of measures. He said the goal was "to protect the middle and working classes, given the rise in the cost of living, energy, and food."
Although inflation and energy prices in Spain have dropped sharply in recent months, many Spaniards continue to suffer greatly from a crisis that began with the COVID-19 pandemic in 2020 and was worsened by the outbreak of the Russian war against Ukraine and the Western sanctions on Russia.