Government and Industry Join Forces to Monitor Supermarkets’ VAT Compliance and Extend Support for Basic Products

The government has been closely monitoring supermarkets to ensure they are not exploiting the VAT reduction on food to increase their profit margins. This temporary measure was implemented to curb inflation, but several supermarket chains have requested an extension to submit their accounts and demonstrate that they are passing on the tax discount to customers.

In February, the Ministry of Consumer Affairs initiated an investigation into major retail distributors to ensure compliance with the anti-crisis decree. The investigation is ongoing as some chains have requested an extension of the deadline provided by the ministry. The ministry has stated that all required information has been submitted and is currently being reviewed.

The National Commission of Markets and Competition (CNMC) is also monitoring supermarkets to ensure they are complying with regulations. A report published in July 2023 confirmed that distribution chains were correctly passing on the VAT reduction to consumers. The CNMC is working on an updated evaluation report on the measure.

Meanwhile, the food industry is 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 is hoping for political stability to expedite the processing of relevant bills.

Overall, it appears that both government agencies and industry groups are working together to prevent misuse of this temporary measure while also mitigating rising prices for consumers through extended support for basic products like meat and fish.