By Rund Abdelfatah
THERE is a bit of good news for consumers as major shopping chains in Spain have promised to absorb the impending 3% IVA (VAT) increase.
Supermarket giant Mercadona, which claims 90% of its more than 8,000 lines have kept the same prices from a year ago, is the latest to announce it will not pass on the IVA increase to customers, joining other big names including, Inditex, Eroski, Carrefour, Lidl, Mango, H&M and Corefiel.
The IVA rate is set to jump this weekend from 18% to 21% with the reduced rate rising from 8% to 10%, while the super-reduced rate, which applies to fresh food staples, books or prescription drugs, will remain at 4%.
Many big chains are now promising consumers will not have to pay the increase.
However, a spokesperson for the Spanish Confederation of Housewives, Consumers and Users (CEACCU) believes the decision is ‘very short-term’ and a representative for the Organization of Consumers and Users (OCU) predicts ‘within the year these chains will likely raise their prices’.
The IVA increase, which comes into effect this Saturday (September 1), will affect every sector of the economy and the CEACCU estimates it will cost a family of four up to €600 more per year.