Prime Minister Gintautas Paluckas announced that the Lithuanian Parliament will consider introducing a reduced VAT rate for food products and public catering establishments in the spring session. Though he has not pledged his support, he recognized that this measure could benefit the restaurant industry.
The Prime Minister stated that the decision on the tax relief would be made after evaluating whether the benefits for catering establishments would surpass the resulting budget losses.
“We are not really moving anywhere yet, there are various initiatives regarding taxes, but all tax initiatives, including this one, will be discussed in the spring session, after a comprehensive assessment of both the budget losses, the characteristics of the sectors, and the additional revenue needed to finance public services,” G. Paluckas stated reporters in the Seimas on Tuesday.
Earlier, the Lithuanian Parliament (Seimas) accepted for consideration Draft Bill No. XVP-90 which aims to introduce a reduced 9% VAT rate on essential food products on 30 December 2024.
The proposed bill also includes a measure to extend the lower VAT rate to catering and beverage services, excluding alcoholic beverages.
This initiative is designed to reduce the cost of essential items for consumers and provide relief to the food service sector. Under the bill, the government or an authorised institution will be responsible for establishing and updating a list of eligible food products. This will ensure that only the most essential food items are covered by the reduced VAT rate.
