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Tuesday, Mar 25, 2025

Congress Board Blocks VAT Reduction on Essential Foods Amid Legislative Controversy

Congress Board Blocks VAT Reduction on Essential Foods Amid Legislative Controversy

Majority-controlled Congress Board disregards legal advice to reject Senate amendments aimed at lowering VAT on basic food items.
The Congress Board in Spain has acted against the advice of its chief legal counsel, as reported by sources close to Congress President Francina Armengol.

This decision was influenced by two government reports from the State Attorney's Office and the General Directorate of Constitutional Affairs, both under the purview of Minister Félix Bolaños.

The Congress Board, which holds a majority of government party representatives, has vetoed several Senate amendments based on these government reports, despite warnings from the chief legal advisor that such actions contravene existing jurisprudence.

This event marks the first occurrence in Spain's democratic history where the Congress Board has taken such a step.

Significantly, this action is seen as an infringement on the legislative capacity of the Senate, as outlined in Article 66 of the Constitution, which states that only the Plenary of Congress has the authority to debate and act upon Senate amendments rather than the Board itself.

The historical context of this conflict dates back to December 19, when Congress approved the government's Food Waste Law and sent it to the Senate for further deliberation.

The People's Party (PP), capitalizing on its majority in the Senate, introduced amendments to the government's legislation, including a proposal to reduce the VAT on basic food items to 2% until the year's end, as well as changes to the transitional remuneration regime for cogeneration plants that had finished their operational life.

The Ministry of Finance, holding the power to block amendments affecting current budgets, assessed that these proposed changes would impact revenue collection.

In response, the ministry issued a veto to the Senate, which was initially rejected by the Senate Board, citing advice from its legal advisors.

This week, the revised text containing Senate amendments was returned to Congress.

Despite the constitutional stipulation that the full Congress must engage in legislative activity to accept or reject Senate amendments, the Ministry of Finance issued another veto, which the Congress Board accepted.

According to sources from the Congress Board, while the Constitution acknowledges the government's right to issue vetoes, it does not specify limits on frequency or authority regarding such actions.

This situation marks a first for the government to veto Senate amendments, potentially setting a precedent for future occurrences.

Congress Board representatives interpreted that acceptance of the amendments would undermine the government's veto power, suggesting that the Senate's aim was to ensure all legislative matters be directed through Senate approval without the possibility of being vetoed.

Despite the chief legal advisor's report indicating that the amendments could be vetoed, it also advised against such action, emphasizing that these originated from the Senate.

The Board discounted this input, instead relying on the arguments presented in the government reports.

The PP has requested a postponement of the vote to allow for further examination, a request that the Board declined, asserting that sufficient consideration had already been given.

The PP has criticized the Congress Presidency for aligning closely with the government of Pedro Sánchez, stating that the refusal to postpone the debate contradicts established doctrine by the Constitutional Court and the secretary general's interpretations.

They have stressed that this event is unprecedented in the last 50 years of legislative practice.
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