<\/p>\n
The Estonian Chamber of Agriculture and Commerce and the Estonian Traders Association are calling on the government to lower the VAT on basic food products. The organisations issued a joint public appeal stating that a tax reduction is essential to ensure the well-being of Estonians, economic security, and the competitiveness of local production. Currently, the VAT on basic food products in Estonia is 24%.<\/p>\n
Food consumption in Estonia has been declining for nearly three years, and more than half of all food is sold only at discounted prices. “High VAT and rising production costs have led to cheap imported food replacing local, high-quality food. This is unsustainable for consumers, producers, and retailers alike,” says Kerli Ats<\/b>, Chair of the Board of the Chamber of Agriculture and Commerce.<\/p>\n
According to Ats, every price increase hits Estonians harder than in other parts of Europe because food makes up a large share of household expenses. “Lowering the VAT on food would be a quick and direct measure to ease the financial burden on families.”<\/p>\n
Nele Peil<\/b>, CEO of the Estonian Traders Association, points out that Estonian families spend nearly a quarter more on food than the EU average. “The quantity of purchased food has decreased by about one-fifth. If the government decides to act in the interests of its citizens and reduce VAT, the retail sector promises that the relief will be reflected in household budgets.”<\/p>\n
According to the food sector, a tax reduction is important not only for household income but also for preserving jobs. In most European countries, food is subject to a reduced VAT rate ranging from 0 to 15%. For example, in Finland the rate is currently 14%, with plans to reduce it to 13.5% in 2026. In Germany, food VAT is 7%, in France either 5.5 or 10% depending on the product, in Sweden 12%, and in Spain and Italy 10%. In the United Kingdom, most food is tax-exempt.<\/p>\n
Estonia is one of only four EU countries that does not apply a reduced VAT rate to food. The only country with a higher food VAT is Denmark, at 25%.<\/p>\n
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