VAT cuts on foods to continue in Hungary next year
Staff Writer |
“The VAT cuts on foodstuffs begun in 2014 will continue, and accordingly the VAT of fish will be reduced from 27 percent to 5 percent from January of next year if the National Assembly authorises the draft budget for next year in mid-June”, the Ministry of Agriculture’s Minister of State for agricultural Economy announced at a press conference in Budapest.
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György Czerván told reporters that the tax cut will include live fish for human consumption, roe, milt, fish liver on other offal, as well as freshly refrigerated and frozen fish.
The VAT cut also applied to fish fillets and other fish meat. “The tax cut is valid for the most important fish categories”, he added.
Czerván pointed out that the first phase of tax cuts, which are aimed at purifying the market and increasing consumption, was the reduction of the VAT on live pigs and half-carcasses in 2014.
“This had a positive effect, the market became tangibly cleaner, there was an increase in the purchasing of live pigs and the sales of breeding stock, as well as in the number of farmers with pigs”, he said.
“Based on these experiences, the Government decided to continue the reduction of VAT and reduced the VAT on beef and lamb products to 5 percent from 1 January 2015, followed by the reduction of VAT on pork to 5 percent from 27 percent on 1 January 2016, thanks to which the VAT cut not includes the whole pork product chain.
On 1 January this year, the VAT on fresh milk, poultry meat and eggs was also reduced to 5 percent”, he explained.
The Minister of State told reporters that if consumption, which in Hungary currently stands at 6.2 kilogrammes per head, remains unchanged, the tax cut would cause a reduction in revenue of some 4-5 billion forints for the national budget, but consumption is expected to increase as a direct result of the tax cut, meaning average fish consumption in Hungary could see a rapid increase to 7.0-7-.5 kilograms, which would counterbalance the loss of revenue.
Mr. Czerván confirmed that the Government and the Ministry remain committed to decreasing the VAT on foodstuffs, and the level of VAT on other foods could also fall as allowed for by the budget. ■