Latvia will extend the application of the reduced VAT rate on fruit and vegetables

Published 2020년 10월 10일

Tridge summary

The Latvian Ministry of Agriculture has kept the 5% reduced VAT rate for 64 agricultural products, despite generating more tax revenue and reducing the 'gray zone' by 20%. This decision has led to a significant consumer price drop of 11-12%. These products join other items like books, public transport services, and baby food, which also benefit from a lower VAT rate, while the standard rate is 21%.

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Original content

“Overall, we see the industry paying 15 million euros more in taxes than before, and the gray zone has shrunk by about 20 per cent. This is enough argument for me to continue to maintain the reduced VAT, ”Janis Eglitis, head of the Latvian Ministry of Agriculture's office, told Latvian Radio. One of the advantages of the 5 percent discounted VAT is that the consumer price has decreased by 11-12 percent. The reduced tax rate applies to 64 products, such as: apples, chokeberries, raspberries, cranberries, pears, carrots, quince, lettuce, cabbage, cucumbers, zucchini, potatoes (without claiming completeness). In Latvia, the standard VAT rate is 21 per cent and a reduced rate of 12 per cent applies to certain products ...

Source: Agroinform