Lithuania's Prime Minister Saulius Skvernelis disagrees with the proposal made by their coalition partners, the Social Democrats, to lower the value-added tax (VAT) tariff on food products, saying that the step would not lower prices.
Saulius Skvernelis
© DELFI / Karolina Pansevič

"This will not be actual efforts against growing prices, because when we speak about prices for food products, VAT reduction, unfortunately, stays with the seller and very rarely reaches the consumer. I think that the main thing is that increase of competition in the field and arrival of new retail chains to our country proved to have a truly effective impact, when it comes to reduction of prices," Skvernelis told Žinių Radijas news radio on Thursday morning.

In his words, the Competition Council is keeping an eye on the market for prices agreements among retail chains. The prime minister said such deals would be difficult to hide.

Andrius Palionis , elder of the Lithuanian Social Democratic Party's political group, said on Wednesday that the party wanted lower VAT on the main food products, including bread, dairy and vegetables. In his words, this could be done from later year, not from 2018.

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