Saeima approves reduced 5% VAT rate on fresh fruit, vegetables

RIGA - Saeima today passed in the final reading amendments to the Law on Value Added Tax (VAT) setting a reduced 5 percent VAT rate on fresh fruit, berries and vegetables typical of Latvia.

The reduced VAT rate will be charged on fruit and vegetables from January 1, 2018 to December 31, 2020.

As they debated the draft amendments, lawmakers rejected proposals to change the initiative or expand the application of the reduced VAT rate. MP Julija Stepanenko (Harmony), for instance, proposed charging a reduced 12 percent VAT rate on bread, fresh meat, fish, milk and butter.

The Saeima faction of For Latvia from the Heart, meanwhile, proposed a reduced VAT rate on dairy products and bread, as well as food services, excluding alcohol.

A proposal by MP Vitalijs Orlovs (Harmony) to set the 5 percent VAT rate on government-funded medicines was also struck down.

At the moment, a reduced 12 percent VAT rate applies to baby food, while the standard 21 percent VAT rate applies to all other food products.