Latvia, Legislation, Markets and Companies, Retail

The decision was made when the association repeatedly expressed its opinion, which contradicts Rimi beliefs and business practices, said Enina and pointed out that today Rimi stores will begin to gradually reduce their prices. This campaign will conclude on July 1, when the new value added tax rate will come into force, writes LETA.

Rimi Latvia board chairman Valdis Turlais said he was puzzled by the association's decision to discredit the positive signal to Latvia's economy, since Rimi, by signing a memorandum of cooperation with Prime Minister Valdis Dombrovskis (Unity), has resolved to reduce food prices in accordance with the VAT reduction.

As reported, the value added tax rate will be reduced from the current 22% to 21% on July 1 of this year, according to amendments on the Law on VAT rate passed in the final reading by Saeima on May 24.

The Merchants' Association said in a recent statement that reducing VAT on food products from 22% to 10% would have been much more efficient than the general VAT reduction of 1%, and that retailers would have to spend a lot of money on changing prices due to the VAT reduction.