Coalition agrees to apply reduced 12% VAT rate on fresh fruit and vegetables

RIGA - The government coalition on Monday agreed to apply a reduced 12 percent value added tax (VAT) rate on fresh fruit and vegetables next year, Prime Minister Evika Silina (New Unity) told journalists after the weekly coalition meeting.

Given that such a measure still requires the alignment of financial sources, the government will prepare the proposal for the second reading of Latvia's 2024 budget bill, Silina said.

In recent years, the VAT rate on fresh fruit and vegetables had been set at 5 percent.

Earlier, it was assumed that next year, the VAT rate on fresh fruit and vegetables will be brought back to full 21 percent, but now a compromise solution has been found to set the tax rate at 12 percent. 

Previouly, the prime minister said that the government coalition has agreed to only support local fruit and vegetable producers and not a wide range of producers. 

The reduced 5 percent VAT rate on fresh fruit and vegetables is effective from January 1, 2018 to December 31, 2023.