Denmark's food VAT cut could cost state 17.4 billion kroner annually

The Danish government plans to eliminate VAT on fruit and vegetables and halve the rate on all other food items, with the reforms expected to be implemented no earlier than 2028. A response from Tax and Growth Minister Jakob Engel‑Schmidt estimates the measures would cost the state budget about 2.6 billion kroner per year for fruit and veg and 14.7 billion kroner for the broader food‑tax reduction, totalling roughly 17.4 billion kroner annually. The cost depends on how product categories are defined, a detail that remains unsettled. Implementation will require a new IT system in the tax authority. The proposal follows earlier attempts by the previous SVM coalition, which set aside a 6 billion‑kroner fund for similar tax‑cut options but did not act before the 2022 election.