A customer shopping at a grocery store in Helsinki. Photo: Mikko Stig / Lehtikuva
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The Finnish government has proposed reducing the value-added tax (VAT) on food and other essentials by half a percentage point as part of its 2025 budget planning.
Under the draft measure announced by the Ministry of Finance on Thursday, the reduced VAT rate would decrease from 14 percent to 13.5 percent. The proposal is now open for public consultation until 15 August.
The change would affect a broad range of goods and services, including groceries, pharmaceuticals, books, fitness services, and tickets to cultural and sporting events.
At the same time, the VAT on public broadcasting services would rise from 10 percent to 13.5 percent, aligning it with the adjusted reduced rate.
If approved, the new rates would come into force at the beginning of next year.
While the cut is minor, Finland’s largest supermarket chains, S Group, Kesko, and Lidl, have announced plans to pass the full savings on to customers. The government expects the effect on disposable incomes to be limited.
The move follows last year’s increase in the standard VAT rate, which rose from 24 percent to 25.5 percent. At that time, the reduced 14 percent VAT bracket was left unchanged.
HT
- Next Article Annual healthcare fee hikes planned, raising concern for low-income groups
Source: www.helsinkitimes.fi
