The government coalition has agreed to support only local fruit and vegetable producers instead of the entire range of producers, said Latvian Prime Minister Evika Siliņa on Wednesday, the 4th of October.
The Saeima faction of For Stability political party proposes maintaining the reduced 5% VAT rate for food products typical for Latvia until 2027. The party also proposes maintaining reduced VAT rate for fresh fruits and vegetables. Commenting on this proposal, Siliņa told the media that this way the 5% VAT rate would apply to a wide range of producers, and “is unlikely to promote competition for local producers”.
The PM explained that the coalition has reached an agreement for the state to support specifically local fruit and vegetable producers.
Funding of EUR 3 million is already reserved in the state budget for 2023.
The Minister of Agriculture Armands Krauze is informed of this. When it was in the opposition, his party – Union of Greens and Farmers – stood in favour of a reduced VAT rate.
“Krauze knows about it. He may be willing to discuss the 5%, but right now the agreement is about support for local producers, and as I understand it, local producers already welcome it,” said the Latvian PM. She expects the reserved EUR 3 million will promote local producers’ competitiveness and exporting capabilities.
Also read: Latvian PM wants to support more households with mortgage loans