Food VAT returning to 5% in Poland as inflation falls
The Ministry of Finance announced its intention not to extend the 0 VAT rate on food. The decision was made on the basis of the latest data on falling inflation and the slowdown in the growth rate of food prices.
From April 1, 2024, the food rate in Poland will return to 5%. The zero VAT rate on food has been in force in Poland since February 1, 2022. It was introduced at that time due to high inflation. In January 2022, the inflation rate was 9.2% annualized. According to the latest data from the Polish Central Statistical Office, inflation in January 2024 was 3.9% year on year.
In December 2023, Minister of Finance Andrzej Kolorowniak (part of the "transitional" government of Mateusz Morawiecki) extended the zero VAT till the end of March 2024.
What exactly will become more expensive? First of all, basic food products such as:
- cereals,
- confectionery products,
- vegetables and some roots and tubers,
- processed vegetables, fruits, nuts,
- edible meat and offal,
- edible fish and crustaceans, molluscs and other aquatic invertebrates - excluding lobsters and octopuses,
- processed meat, fish, crustaceans, molluscs, etc.,
- eggs,
- natural honey,
- infant milk, formulas for further feeding of infants, formula milk for children,
- fats and oils of animal and vegetable origin,
- fruits and nuts,
- malt,
- starches, inulin, wheat gluten,
- oil seeds and fruits,
- products made from cereals, flour, starch or milk,
- soups and broths and their preparations,
- ice-cream,
- fats composed of plant or animal products,
- water: mineral, carbonated, flavored,
- non-alcoholic drinks (excluding fruit, nut and vegetable juices),
- dietary foods for special medical purposes.
Zero VAT on food is a heavy burden on the state budget. The Ministry of Finance estimated in December 2023 that after another extension of this rate, budget revenues from the goods and services tax may decrease by approximately PLN 2.93 billion.
Source: Interia.pl/ Business Insider/ Money.pl