As of Friday, seven basic everyday goods such as bread, milk, eggs, baby food, baby diapers, feminine hygiene products and adult diapers should be sold at a zero VAT rate.
This is in accordance with Cabinet’s decision on Tuesday as a temporary measure against rising costs with more essential products expected to be added to the zero VAT list.
The goal of the authorities now is to ensure that the reduction in VAT has a commensurate impact on the final prices paid by the consumer, Philenews also reported on Wednesday.
Insiders also said the decree is expected to be sent to the state printers for publication later on Wednesday.
The zero VAT rate will be applied for a period of six months, that is till October 31, with the possibility of renewal.
Currently, consumers pay 5% VAT when they buy bread, milk, baby food, eggs and sanitary napkins. When they buy baby and adult diapers, VAT is as high as 19%.
The VAT zeroing was carried out under European Directive 2022/542 which now allows member states to reduce or zero VAT rates on some basic consumer products.
According to a statement from the Ministry of Finance, the purpose of the measure is to provide relief to households burdened with the increased prices of basic goods due to external factors – basically the ongoing war in Ukraine.