Minister: lower VAT rate on food wouldn’t benefit people

The Lithuanian government has no plans to cut the VAT rate on food as it would not benefit people, Finance Minister Gintare Skaiste says amid calls by presidential advisers to introduce a lower VAT rate on food under a different model that would benefit consumers.

"We have repeatedly expressed this position that VAT exemptions in sectors where prices are mostly unregulated do not serve their purpose as they benefit resellers, the big supermarkets and suppliers, and not the end consumers," Skaiste told journalists on Thursday.

On Tuesday, Irena Segaloviciene, the president's chief adviser on economic and social policy, said a lower VAT rate on food could be introduced to fight rising inflation, adding, however, that a model should be found to ensure it benefitted the end consumer.

Skaiste says a better option would be to increase the incomes of the most socially vulnerable people.

The current VAT rate in Lithuania stands at 21 percent.