Latvia cuts VAT on staple foods to 12% starting July 1

Effective 1 July, Latvia reduced the value‑added tax on four basic food groups—bread, milk, poultry meat and eggs—from 21 % to 12 %. The pilot rate will remain in force until 30 June 2027. Retailers that honour the lower rate can display a “Honest VAT Reducer” label, signalling transparent pricing to consumers.

The change is part of a joint effort by the Ministry of Economics, industry bodies and the Consumer Rights Protection Centre (PTAC). PTAC director Zaiga Liepiņa said the lower rate is meaningful only when shoppers see the benefit, adding, “The price calculator helps everyone verify how the VAT reduction can appear in the final price.” Economy Minister Viktor Valainis stressed that the measure aims to curb living costs and support local producers, even though it will cut state revenues by roughly €15 million over six months.

The initiative also includes a voluntary agreement with producers, suppliers and retailers to apply the reduced VAT transparently, and a dedicated online portal offering calculators and information for consumers.