Reduced VAT on food products: results of the first month
A month after the reduced VAT rate was applied to four main food groups in Latvia, the first results show that while most residents have not yet noticed a significant drop in prices, statistics indicate that products have become cheaper and purchases have increased.
Today, August 4, the first results were summarized after a month of the reduced value-added tax (VAT) rate on four major food groups in Latvia. Although the majority of Latvian residents have not yet experienced a notable decrease in prices, statistical data suggest that products have become less expensive and shopping frequency has grown.
This information was provided by the team of the LSM program “Обсудим вечером” (in Latvian — “Pārrunāsim vakarā”). The measurements and analysis conducted during the first month reveal a contradictory situation: the public’s perception of price changes differs from official statistics. The program raised questions about whether the first month’s results meet expectations and what further adjustments might be possible.
As indicated in the report, the reduced VAT was introduced with the aim of easing the burden of food prices on residents. The visible effect so far is partial, but positive in terms of trends. Monthly statistics show that price reductions have been recorded, along with an increase in purchase frequency. However, it should be noted that residents’ subjective assessment of price changes does not yet reflect the official figures.
The program “Обсудим вечером” invites discussion on what exactly the first month’s experience reveals, whether the introduced changes have lived up to hopes, and what steps should be taken next. These questions remain open, but the available information allows for the conclusion that the reduced VAT has already had an impact on the food market, although not as pronounced as many had hoped.
In the coming months, monitoring of the situation is likely to continue in order to assess the long-term effect on prices and consumption. For now, both residents and industry representatives are waiting for the promised price reduction to become more tangible in everyday shopping.
