Starting next year, a reduced 10% VAT rate will be extended to further food products. This concerns exclusively healthy food such as dairy products, fruits and vegetables grown in Slovakia, fruit and vegetable juices, or honey and bread rolls. Parliament approved on Thursday the respective amendment to the VAT Act sponsored by junior coalition Slovak National Party MPs.
"It is the first package of measures to test the reactions of retail chain outlets as well as the market so to see if this is the right way to lower prices," said the leader of the junior coalition Slovak National Party (SNS) Andrej Danko. According to him, Slovakia has much higher VAT on food than Italy, Austria, Slovenia and Spain.
"It is an absolutely unsystematic step. VAT should be lowered on a global scale," said for public RTVS opposition Freedom and Solidarity MP Jozef Rajtár. According to MP Antošová, lowering VAT on all food stuffs would cost €500 million. Nevertheless, the 10% drop does not necessarily mean lower food prices in shops. "It is necessary to realise that bakers have announced a rise in the prices of their products as of January 1 which leads to the question of bakery and dairy products, and a vegetable price rise would cover the whole drop in their price," warns Pavol Konštiak, a vice-president of Association of Trade and Tourism. Moreover, shopkeepers point to the fact that setting different prices for different products requires an additional workforce, which means to be paid more.
The list of products to which lower VAT will apply was narrowed down in line with Antošová's proposal and had been changed at the moment of voting. That's why it, for example, excluded carrot, peaches or apricots. This step should reduce the measure's impact on the state budget, which now amounts to €65 million. As the MP added, the aim is to save money for people and support domestic food producers as well.
