On 22 August, the Latvian government started working on the budget for 2018. The Cabinet will study the report from the Ministry of Agriculture, which proposes to reduce VAT on typical Latvian vegetables, fruits and berries to 5%.
The report argues that such a step would help improve the competitiveness of those products. The list includes apples, pears, cherries, plums, strawberries, raspberries, black and red currants, potatoes, tomatoes, cabbage, cucumbers, beans, turnips and many other products.
At the moment, Latvia is one of the five EU countries where no VAT reductions have been applied on food. The other four are Lithuania, Estonia, Bulgaria and Denmark. But in Latvia there is an exception: a 12% VAT is levied on special food for infants.
As the authors of the report note, the reduction of VAT on the above products would mostly benefit the people with low incomes. At the same time, an agreement on the proportional reduction of prices should be signed with retailers.
Source: delfi.lv
