Minister Defends Food VAT ({{commentsTotal}})

Source: Photo: Postimees/Scanpix

Outspoken Finance Minister Jürgen Ligi has defended the decision to keep VAT on food on same lavel as other products in today's Äripäev, saying any exception would be hypocritical.

The minister said in the business daily that many countries, although they are buckling under debt and running budget deficits, still refuse to bring food VAT in line with other products, Äripäev reported today.

Half of the continent's food is wasted and half of the population is overweight, Ligi said, adding that once tax has been lowered on food, it is politically impossible to raise it again.

Ligi said that lower tax on food would benefit the rich more, as they buy more, and the lost income from lower VAT would have to be balanced out by higher income and social taxes.

Äripäev said today that Estonia has one of the highest VAT levels on food in Europe, with the majority of states opting for a lower level of tax on food items.

Tax on food is 20 percent in Estonia, but only 12 percent in Sweden, 7 percent in Germany and France and 14 percent in Finland.