Austria Slashes VAT on Basic Food to 4.9%

From today Austria reduced the value‑added tax on a basket of essential food items—from 10% to 4.9%. The cut applies to products such as milk, eggs, fruit, vegetables, cereals, pasta, bread and salt. The government estimates the measure will cost about €400 million a year, partially offset by a new €2 surcharge on parcel deliveries expected to raise roughly €280 million.

Households are projected to save around €57 per year, roughly €4.75 per month, though consumer groups argue the real impact may be modest. One example family calculated a monthly saving of only €7.6, comparable to the cost of a single school lunch. The reform was championed by Vice‑Chancellor Andreas Babler and supported by the coalition of ÖVP, SPÖ and NEOS, while the FPÖ and the Green Party voiced criticism.

The tax reduction makes Austria the region’s lowest‑taxed country for basic groceries, prompting political debate in neighboring Slovenia, where lawmakers are considering a similar measure.