Assessment of the Impact of Reducing the VAT Rate from 21% to 5% in Latvia on Specific Groups of Food Products

Project description

The objective – is to perform calculations to assess the impact of the VAT rate reduction from 21% to 5% in Latvia for certain food product groups in 2017 – fresh fruits, vegetables, berries, and potatoes typical for Latvia.

Project tasks:

• To estimate price reduction in the relevant product group;
• To determine the possible increase in consumption;
• To predict the impact on the state budget.

The calculations' results will allow for a quantitative and comprehensive assessment of the effect of reducing the VAT tax on individual, most important food product groups, providing policymakers with quantitative material for decision-making.

Many fruit, vegetable, berry, and potato merchants illegally evade VAT payments.