The Latvian government has decided that in the next three years - until 2023 - a reduced value added tax rate of 5% will remain in force for vegetables, fruits and berries typical of Latvia. Three years ago, the rate was reduced to stimulate the competitiveness of local producers and reduce the shadow economy, reports Latvijas Radio.
To prevent this step from hitting the budget, it was decided that the Ministry of Agriculture would pay 3 million Euro for the initiative from its own funds.
“Overall, we see that the industry has paid 15 million Euro more in taxes than before, which outweighs those 3 million Euro. The shadow economy has already been reduced by 20%. From my point of view, this is a good enough argument to keep this reduced rate,” said the head of the bureau of the Ministry of Agriculture Janis Eglitis.
At the moment, the list of foods for which this reduced rate applies includes apples, chokeberry, raspberries, lingonberries, pears, carrots, quince, lemongrass, sweet corn, lettuce, cranberries, gooseberries, fennel, beets, turnips, cabbage, cucumbers, currants, zucchini or potatoes. The list contains a total of 64 items.