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Latvia studying reduction of VAT on fresh produce
The Ministry of Agriculture of Latvia plans to submit an informative message to the government regarding a possible reduction of the value added tax (VAT) on fresh vegetables, fruits and berries from 21% to 5%.
The report prepared by the Ministry of Agriculture summarises the conclusions of the working group on reducing VAT on food, and considering that the discussion on this topic has been going on for longer than a year, the parliamentary secretary of the Ministry of Agriculture, Ringhold Arnitis, said that the agency is now turning to international experience.
"Our producers are always losing against competitors in Poland and other EU countries. There are only five countries left where VAT on berries, vegetables and fruits is not reduced, (...) and we have found that the rate reduction should not have a strong impact on the budget, with the treasury receiving about 5 million Euro less," stated Arnitis.
Discussing the possibility of lowering the VAT, the growers themselves believe that it would help improve their competitiveness, bringing prices down and tackling the shadow economy, which is particularly high in this sector.
The working group decided that VAT should be lowered for vegetables, fruits and berries that can be grown in Latvia. But the possibility of including such fruits as, for example, watermelons and melons, was also discussed.
Now the Ministry of Agriculture expects the assessment of other Ministries about the report, which foresees the Ministry of Finance preparing the necessary legislative amendments by 1 July.
Publication date: 4/20/2017
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