Tuesday, May 15, Prime Minister Valdis Dombrovskis, Chairman of the Board of Latvian Food Traders Association Valdis Turlais and the executive of the Minister of Finance, Minister of Welfare Ilze Vinkele signed the cooperation memorandum on lowering VAT rate.

«I am pleased with the initiative of the largest Latvian small trade association to form an agreement with the government providing for the government’s decision to lower VAT rate down to 21% and, as a result, to lower the end price of products on the shelves of shops. I expect the same kind of attitude from the remaining traders and service providers, I also respectively evaluate the readiness of the Latvian Petrol traders association and Latvian Petrol trader’s Union to join this agreement», – the Prime Minister points.

The Cabinet of Ministers of the Republic of Latvia and the companies, represented by the Latvian Food Traders association (LFTA), Iki, Rimi and Maxima agreed upon their cooperation in lowering the Value Added Tax (VAT) rate.

The LFTA supports Prime Minister Valdis Dombrovskis’ plan to lower the VAT rate by 1% starting from July 1, 2012, in order to balance out the tax burden with neighbouring countries as well as to limit inflation. If VAT is lowered, then the LFTA members promise to respectively lower product prices in their trade networks.

BNN previously reported that the Ministry of Finance declared the decrease of the Value Added Tax (VAT) rate from July 1, 2012 from 22% to 21%, if businessmen promise to reflect this in product prices.

Ref: 102.109.109.1876