Slovakia to cut food VAT rate 2016
Slovakia has proposed a reduction in its VAT rate on basic foodstuffs from 20% to 10% from 1 January 2016.
The Slovakian VAT rate on basic foodstuffs is one of the highest in the European Union. It is set at its standard VAT rate of 20%. Most other EU countries apply a reduced VAT rate to foodstuffs. The UK VAT rate on food is nil – also for Malta, too.
The impact of this high rate is felt most severally on the poorest since they spend a higher proportion of their income on food. The ruling is part of the SMER-SD government’s programme to improve social equality.
Slovakia is looking to cut its standard VAT rate from 20% to 19% soon, although the IMF has warned against this.