Bill seeking to lower VAT on food products fails in parlt

TALLINN – A bill submitted by the parliamentary group of the opposition Center Party regarding a proposal to the Estonian government to lower the value added tax (VAT) on food products to 9 percent failed in a parliament vote on Tuesday.

Altogether 31 MPs voted in favor of passing the bill. However, in order for it to be adopted as a decision, it would have needed a majority of the members of the Riigikogu, that is 51 votes in favor.

A 20 percent VAT currently applies to food in Estonia. Estonia is one of four member states of the European Union that does not apply a reduced VAT rate to food products.

Similarly to Estonia, the 20 percent standard VAT rate is applied to food products in Bulgaria, while the standard VAT rate is 21 percent in Lithuania and 25 percent in Denmark. Most EU member states have a more favorable VAT rate for food products, which ranges from 0 to 15 percent depending on the country and product group.