The Finance Committee discussed the citizens' initiative on Tuesday. The initiative seeks to reduce food VAT to 10 percent. The initiative has nearly 100,000 signatures.
Jana Guzanova is the initiator of the initiative. She says that food prices have risen by 40 percent over the past couple of years. Wages, however, have not risen as much. Many poor people live in Estonia. Approximately every fourth person is poor. It is difficult for them to afford food.
Deputy Chairman of the Finance Committee Andrei Korobeinik said that Sweden and Finland are planning to reduce VAT. Latvia is also considering it.
Chairman of the Finance Committee Annely Akkermann said that the committee only listened to the initiative. The decision will be made on March 7.
In Estonia, the VAT on food is 24 percent. This is one of the highest in the European Union. The initiators believe that this tax worsens poverty.
Jana Guzanova is a food blogger and winner of MasterChef Estonia. She ran for the Tallinn City Council with the Center Party. The initiative collected over 98,000 signatures. This is the most signed initiative in Estonia.
Most European countries have lower VAT on food. For example, Finland has 14%, Sweden 12%, and Germany 7%. The initiative emphasizes that high VAT increases inequality.
EKRE and the Center Party have previously demanded a reduction in VAT. The Social Democrats also support it.
Finance Minister Jürgen Ligi says that reducing VAT would help merchants, not people. Education Minister Kristina Kallas says the government does not have the money for it.