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A reduced value-added tax (VAT) rate should apply to basic food products, according to a new bill being proposed by a Labour Party MP.
© DELFI / Šarūnas Mažeika

MP Kęstutis Daukšys of the Labour Party submitted a bill on Thursday, suggesting a cut in VAT on products like bread, pasta, dairies, fresh meat and fish, flour, vegetables and other foods to 5%. The standard VAT rate currently stands at 21%.

Daukšys said that the tax cut would be beneficial for low-income households. He also said that many Lithuanians in the regions close to the Polish border regularly go shopping in the neighbouring country because of lower grocery prices.

This is not the first proposal to cut VAT on food products. Parliament has previously rejected tax cuts on some meat products.

President Dalia Grybauskaitė said in 2013 that reduced VAT rates on meat brought few direct benefits to consumers, but instead benefitted businesses. She suggested that the proposals were motivated by business interests of the Labour Party's leader Viktor Uspaskich whose family owns a big food business.

LRT