A lower value-added tax (VAT) rate has been applied to selected foodstuffs since the New Year. Prime Minister Robert Fico indicated that if the lowering from 20 to 10 percent works out, the scale of selected foods could expand over time. Since January 1, this lower VAT rate has been applied to the following foodstuffs: fresh and chilled beef and pork, poultry, rabbit meat, sheep meat and goat meat, chilled freshwater fish and fish fillets. The group of selected basic food also includes milk, butter and bread. "We've decided to apply it only to selected basic foodstuffs that people buy the most", emphasised Fico.
Whether or not retailers will drop their prices to match the reduced VAT rate remains to be seen. "We're monitoring ten big chain stores and 183 shops, where we repeatedly check the same items", explained Agriculture and Rural Development Minister Ľubomír Jahnátek at a press conference on Sunday. The next check-up is due to be held on January 11. Prices will be monitored until June.
Fico said that by the end of this year they will evaluate what the lowering of VAT has brought and whether it's worthwhile to expand the decrease of VAT to other items. "We'll wait to see how this measure will affect domestic producers and if it'll lead to increased consumption of these products. If the results are positive, I don't see any reason why not to continue and expand its scope", added Fico. It's estimated that this VAT decrease will cost the state around €80 million.
