- The issue of VAT on produce in Latvia is causing controversy in the state budget discussions.
- The current reduced VAT rate of 5% for fresh vegetables, fruits, and berries was introduced in 2018 as a pilot project.
- The Ministry of Agriculture concluded that the project was successful, but the Ministry of Finance disagreed.
- The reduced VAT rate was extended until the end of 2023, but there are disagreements on whether it should continue.
- The industry believes that the 5% rate has been beneficial, but there are concerns about the lack of support from the Agriculture Minister.
- The government agreed to a higher but still reduced VAT rate of 12%.
- Finance Minister Ašeradens suggested that this rate is temporary and that other measures will be implemented to support Latvian farmers.
- The industry feels that they were not included in the decision-making process and do not see the 12% rate as a compromise.
- There are concerns about the impact of the VAT rate on the state budget and the development of the industry.
Source: eng.lsm.lv
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
