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Leader of the Social Democratic Party (LSDP) Vilija Blinkevičiūtė on Friday once again urged the Government to reduce value added tax (VAT) on staple foods, but her proposal drew criticism from Conservative MP Mindaugas Lingė, who stated that the MEP’s ideas would only fuel inflation.
Infliacija
Infliacija
© Scanpix / AFP

“Blinkevičiūtė is restlessly pouring gasoline of populism on the burning fire of inflation and creates distrust in decisions of the government by manipulating people’s emotions. Time and time again we hear about the ‘panacea’ of VAT reduction on food,” Lingė wrote on Facebook.

According to the MP, earlier this year the Social Democratic leader stated that “the government was duping people by lying that prices are not the Government’s business”.

Lingė gave Poland, where VAT on food was temporarily reduced from 5% to 0%, as an example. He said prices in Poland increased by 20% in June and inflation has been the highest in two decades, while the budget lost EUR 3 billion zloty, and the lesson to learn is that VAT reduction did not reduce inflation.

The politician added that the Polish government now seems to have cornered itself as the reduced rate VAT had to expire on 31 October, but it is considered to extend the measure because its cancellation would mean further price increases and even higher inflation. Moreover, annulling the VAT reduction would also be an unpopular move politically as the parliament election takes place next year.

MP Lingė underscored that the Lithuanian Government chose a different strategy to tackle the effects of inflation by raising the income of the most vulnerable people.

On Friday, MEP Blinkevičiūtė asked market watchdogs to probe for potential cartel agreements between retailers as increased prices might have contributed to inflation. She also called on the Government to reduce VAT on food.

In addition, the Social Democratic leader criticised the Cabinet for going on holiday instead of considering how to reduce inflation and address other issues with the economy “while people think every day about survival”.

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