ZSA calls for maintaining the 51% VAT rate for vegetables, fruits and berries even after 2020

Since January 1, 2018, amendments to the Law on Value Added Tax (VAT) have been in force in Latvia, which introduced a reduced VAT rate of 5% for fresh fruits, berries and vegetables typical of Latvia. The reduction of the VAT rate for the relevant product group has made a great contribution to the promotion of a healthy lifestyle in society and the Latvian economy as a whole. Therefore, the association “Farmers' Parliament” calls on the deputies to continue to support the application of the reduced VAT rate for fresh fruits, berries and vegetables typical of Latvia.

Less than three years have passed since the 5% VAT rate has been applied to fresh fruits, berries and vegetables in Latvia. As shown by the informative report of the Ministry of Agriculture (MA), the number of various violations in the trade of fruits, berries and vegetables has decreased by 20% and the average number of employees in the sector has increased by almost 6%. Thus, legally operating merchants have become more competitive. At the same time, the prices of fruits, berries and vegetables have decreased by 11.7%.

In addition to the above, the Latvian economy and industry have shown a number of positive trends – the number of VAT payers in fruit and vegetable growing has increased, turnover has increased, and production areas have increased. In turn, data compiled by Latvian traders show that the VAT reduction for fruits and vegetables typical of Latvia has increased their consumption by as much as 14%. This shows that society responded to the price reduction.

On September 10, the Saeima submitted to committees for consideration a proposal submitted by opposition members to apply the reduced 5% VAT rate to fresh fruits, berries and vegetables typical of Latvia even after the deadline expires - after December 31, 2020.

45 deputies voted in favor of submitting the amendments to committees for consideration, while 40 deputies voted against this proposal, which shows the attitude of the Saeima towards this issue that is important for the economy, society and industry. The vote can be viewed here –.

The association "Farmers' Parliament" calls on members of parliament to objectively evaluate the available data and also support the application of reduced VAT to fresh fruits, berries and vegetables typical of Latvia in future votes.