Latvia: Impact of reduction of VAT on fruit and veg already noticeable

After the reduction in Latvia of the VAT rate for local vegetables and fruits, which came into force on 1 January 2018, these products have become cheaper and the demand has increased.

Producers and trading companies are already noticing the positive impact of reducing the VAT rate for vegetables, fruits and berries typically-grown in Latvia down to 5%. The measure applies to fresh, washed, peeled and packaged products, but not to those that are frozen, salted or dried.

The new value-added tax does not apply to products that are not grown in Latvia or that are produced in small volumes, such as bananas, oranges, watermelons, mushrooms, peppers and so on.

The head of the cooperative "Musmayu Darzeni", Edite Strazda, said that the positive effect of reducing the VAT on vegetables, berries and fruits is already noticeable.

She hopes that this reduction in the VAT rate will help reduce the shadow economy, but this will be seen in the spring, when street trade begins and the first strawberries and cabbage hit the shelves.

Zane Udras, Communications specialist at Maxima Latvia, also noted that for the first two weeks of January, compared to the same period in 2016, sales of typical Latvian vegetables grew by about 5% at Maxima stores.


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