Minister for the Economy Stephanie Lose said on Thursday that VAT on food products will not be reduced before next year’s parliamentary elections because the short time frame makes the move technically impossible to implement.
The government will look into reducing VAT (moms in Danish) on food in the longer term, Lose also said.
“We simply cannot manage to actually reduce VAT in time, it just isn’t possible,” Lose said during the presentation of a national economic report.
The government has already announced a number of tax reductions, including VAT, on a number of products and services as part of the 2026 budget. These include chocolate and confectionary, books and electricity.
Lower electricity taxes are expected to help inflation fall to 1 percent next year, according to the government report presented on Thursday. Wages are forecast to rise by 3.2 percent on average.
However, lower and potentially variable VAT rates on food items would take up to three years to implement because of technical issues related to government IT systems, the minister explained.
“But the government has said that we are setting work in motion that will make it technically possible. Denmark has not previously had differentiated VAT rates, and a path needs to be created for that to be feasible,” she said.
Denmark has the highest tax rates on food in the EU.
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