Reduced VAT on staple foods explained

Latvia has cut the value-added tax rate on staple foods from 21% to 12%, LSM reported. The reduced rate applies to bread, milk, poultry and eggs.

The measure, which took effect on July 1, is intended to lower the prices of these products. However, the final price is influenced not only by tax but also by other factors.

LSM, together with Latvijas Radio 5’s Pieci.lv, examined how food prices are formed and what the reduced VAT rate means for consumers.