The Estonian Retailers Association and retail chains have launched a campaign aimed at pressuring the state to lower value-added tax on essential food items.
Nele Peil, CEO of the Estonian Retailers Association, told ERR that the level of value-added tax in Estonia is so high that it has exceeded people’s pain threshold.
“Food sales volumes in Estonia’s retail sector have been declining for four years now as people can no longer afford to buy food. We have looked at what would be a realistic proposal given Estonia’s current budget deficit — one that would be financially manageable for the state and help people. Lowering taxes on essential food items would be a win-win scenario: the most favorable for the state and with the lowest administrative burden,” Peil explained.
She added that in such a case, the state would not need to create any measures or administer subsidies itself as the entire administrative burden would remain with the private sector.
According to Peil, the share of local products is highest within the essential food category, meaning that increased sales driven by a VAT reduction would also benefit domestic food producers.
Read more: ERR.EE
