Foodstuff, Latvia, Legislation, Markets and Companies, Taxation

International Internet Magazine. Baltic States news & analytics Thursday, 28.03.2024, 18:05

Latvian government not to consider proposal for lower VAT on fruit, vegetables

BC, Riga, 23.08.2017.Print version
The Latvian government for now will not consider the Agriculture Ministry's proposal for lowering value-added tax (VAT) on fruit, berries and vegetables common in Latvia from 21% to 5%, reports LETA.

Speaking to the press after the meeting of the ruling coalition parties on August 22nd, Prime Minister Maris Kucinskis (Greens/Farmers) said that the budget drafting had just begun therefore any such issues had been removed from the government's agenda but the Cabinet of Ministers might return to the subject once it had a more accurate estimate of the fiscal space and it was clear how much money could be allocated to the new initiatives.

 

As reported, today the Latvian government was expected to discuss the Agriculture Ministry's proposal to lower the VAT rate on fruit, berries and vegetables common in Latvia from the standard VAT rate of 21% to 5%. The Agriculture Ministry insists that it is the best way to fight the shadow economy in the sector and to improve competitiveness of legal vegetable vendors.

 

But the Finance Ministry and the Economics Ministry recently produced reports in which they disapproved of the Agriculture Ministry's proposal, saying that lowering VAT on food was not the most effective way to address the problems of social inequality, to fight the shadow economy and to increase the competitiveness of legal businesses. In addition, the move would create a negative fiscal effect on the Latvian budget, the two ministries said.






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