Differentiated VAT cut proposal in agriculture

The proposals of the Poultry, Meat, and Dairy Marketing Boards to reduce Value Added Tax (VAT) on general basic food items were sent to the MTI on Monday.

The Marketing Boards recall in the communication that the possible VAT reduction in case of  basic food products repeatedly raised in the past years, that the current government has repeatedly discussed, with the full support of the profession and the Ministry of Agriculture, but the initiative always failed.

The proponents estimate that the VAT cut would cause a 20.5 billion HUF VAT loss in the dairy, 18.4 billion HUF in the pig sector, and 21.6 billion HUF in the poultry sector. Thus in total it would cause a 60.5 billion budget loss, which is around 0.2 percent of GDP.  In the view of the professional organizations, this amount would have a neutral fiscal effect. (MTI)