The Lithuanian parliament is to consider value-added tax (VAT) exemptions for food staples in a bid to dissuade Lithuanian shoppers from going to shop in Poland.
© DELFI / Tomas Vinickas

The proposed amendment would cut VAT on basic food products from the current rate of 21% to 5%. A separate bill suggests VAT exemptions for fresh meat and fish.

MPs insist that high food prices and relatively low wages force many Lithuanians to go for grocery shopping in Poland which has lower VAT rates on most food products.

Meanwhile the prime minister and the minister of finance oppose the move, saying that VAT cuts would not result in lower prices and would only benefit producers and retailers. Meanwhile the state budget would forgo a significant chunk of tax revenue.

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