Although the government reduced VAT on certain food products, Latvia has become a leader in price growth in Europe, stated Inna Steinbuka, chair of the Fiscal Discipline Council, in the TV24 program "Person of the Day," as reported by LA.LV.
According to Steinbuka, a recent agreement was reached to reduce VAT on a number of products, but, for example, on chicken and eggs, for which the tax was lowered, prices have recently increased "abnormally" — by about 26% in just one month.
She found it difficult to say whether this is related to the welfare of chickens, but ironically added that perhaps in Latvia, more care is given to chickens than to people. "In any case — whether it is related or not — it is unclear," concluded Steinbuka.
"Prices are rising, and in August, food prices overall increased by 6%. We are the absolute champions of the European Union in food price growth," she stated.
The initiative by the Ministry of Economics to reduce VAT echoes an initiative in Sweden, where VAT on certain products was also reduced. But whether this measure will have an effect is another question.
"This effect may be shared between traders and consumers. If traders take more than half, then the remaining part will not be significant. There should have been some control over the situation," believes Steinbuka.
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