The Ministry of Regional Development and Agriculture is conducting analyses regarding turnover tax (VAT) on food, as people’s willingness to buy Estonian products is decreasing, writes dv.ee.Minister of Regional Development and Agriculture Piret Hartman hinted at the possibility of changing the VAT on food on a radio program Äripäev. “Taxes are the responsibility of the Ministry of Finance, but agriculture, food production and sustainability is our topic,” she said, adding that the issue of lowering the VAT and the experience of other countries has also been discussed with retail chains.
The minister said that the goal is to publish the results of the analysis next spring and then start the debate for the formation of the state budget for next year. Hartman emphasized that Estonia is one of the few countries where no exemptions or reduced VAT rate is applied to food products. “I don’t think other countries have gone for it just for no result,” she added.
Read more at dv.ee.
As Delfi previously wrote, Estonia is one of the five EU countries that has not yet set a reduced VAT rate for food products.
In addition, the coalition agreement of the new government envisages the introduction of a temporary security tax, the component of the security tax is the turnover tax, which will increase from the current 22 percent to 24 percent from July 1, 2025.
For example, if this summer the cost of the weekly consumer basket of a family shopping at a Selver chain store is 70.03 euros, the turnover tax accounts for 15.40 euros. From next July, the NSO will be €16.80, or €1.40 more. Since it became clear earlier this year, when the VAT rose from 20% to 22%, that retailers would not include the increase in VAT in their profits, the cost of the consumer basket is expected to rise.
