Portuguese Prime Minister Luís Montenegro on Friday again ruled out reinstating the Zero VAT scheme on essential food items, saying the tax exemption had only a relatively limited effect on prices and was often not felt in what shoppers actually paid at the till.
Montenegro, leader of the center-right Social Democratic Party who has led Portugal's government since 2024, made the comments while addressing calls to revive the measure, which had been in place following Russia's invasion of Ukraine.
PM calls exemption an indiscriminate measure
The prime minister described the policy as a blunt, indiscriminate measure that did not take into account individual consumers' circumstances. He said it benefited people in a stronger economic position in the same way as it helped the most vulnerable. Montenegro also rejected any change to value-added tax on fuel.
Zero VAT was a temporary suspension of value-added tax on a basket of essential food products, introduced in Portugal as part of a wider European response to the surge in food and energy prices that followed Russia's full-scale invasion of Ukraine in 2022. Portugal's standard VAT rate is 23 percent.
Socialist Party demands emergency measures
On the same day, the Socialist Party, Portugal's main opposition party, submitted a draft resolution in Parliament calling on Montenegro's government to urgently adopt measures to address the rising cost of living.
Among the party's proposals are the reintroduction of Zero VAT on a food basket for three months, renewable, and a cut in VAT on fuel and bottled gas from 23 percent to 13 percent.
Other announcements
Montenegro also addressed separate support measures reported the same day. He said a 12 million euro package for the Douro wine region was intended to compensate small producers.
He also announced that the government was preparing new support for agricultural diesel.
Separately, Montenegro highlighted Portugal's position as a non-permanent member of the United Nations Security Council.
