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Lithuania considers tax cut on meat to boost demand

Staff Writer | August 17, 2016
In a bid to lower the prices of meat and stimulate domestic demand, the Lithuanian government is considering reducing the value-added tax (VAT) on fresh and chilled meat.
Lithuania meat
Meat in Europe   The Lithuanian state revenues would decrease
The proposal was made by the country’s Minister of Finance Rimantas Sadzius. Should the reduction be passed, the Lithuanian state revenues would decrease by an estimated €43 million, according to data obtained by local news site

The Finance Ministry has been considering to implement a rate of 5 per cent or 9 per cent for fresh and chilled meat. Currently, the ministry applies a VAT rate of 21 per cent.

The Lithuanian prime minister Algirdas Butkevicius said that the lower VAT is expected to lead to a considerable decrease in meat prices, and, as a result, to raise domestic consumption. However, if local meat industry players do not lower their prices following the tax cut, the measure will be cancelled.

Butkevicius and Sadzius both represent the country’s Social Democratic Party (LSDP) in the Lithuanian government.

Should the measure be implemented, it is expected to come into force on 1 October, 2016, ahead of Lithuania’s parliamentary elections which are scheduled to take place on 9 October, 2016.