(Bloomberg) -- Portugal plans to introduce a value-added tax rate of zero for a basket of essential food products as it tries to ease the cost of living crisis.

“We are working with the production and distribution sector on a response that translates into a price reduction in a basket of goods that has yet to be determined,” Finance Minister Fernando Medina said at a press conference on Friday. “The solution is to move toward a zero VAT rate on a basket of essential products.”

This measure would be in place from April to October, the government said in a presentation. Portugal currently has three VAT rates: a standard rate of 23%, a rate of 13% and a reduced rate of 6%. The lower rates are applicable to some food products.

Read more: Portugal’s Sonae Says Supermarkets Will Limit Price Increases

The government also plans to spend €195 million ($210 million) to increase public sector workers’ wages from April and €580 million to help vulnerable families deal with rising prices. Portugal’s average annual inflation rate reached 7.8% in 2022, the highest in 30 years, according to the country’s statistics institute.

©2023 Bloomberg L.P.