VAT cuts for meat will not lower prices – Lithuanian president’s adviser

Commenting on recent proposals from the prime minister to introduce VAT exemptions for meat, Lina Antavičienė has told Žinių Radijas that consumers will not feel the effects of the measure, because retailers will eventually raise the prices to their previous levels.

“VAT is the biggest breadwinner of our state budget,” Antanavičienė, chief policy adviser to President Dalia Grybauskaitė, said, noting that cutting VAT rate on meat to 5% would cost public coffers €80 million.

Last week, PM Algirdas Butkevičius, Finance Minister Rimantas Šadžius and the Social Democrat group in the parliament agreed to propose VAT cuts for chilled and fresh meat. Critics of the move say tax exemptions for one food group would not significantly push down prices and are merely and election gimmick.