KDH: Food Prices in Slovakia Growing Despite VAT Reduction to 5 percent

Bratislava, 23 July (TASR) - Food prices in Slovakia are rising, despite the fact that the value-added tax (VAT) on basic foodstuffs has been reduced from 10 percent to 5 percent, the opposition Christian Democratic Movement (KDH) told a news conference on Wednesday, adding that people are reaching deeper into their pockets, but the government is doing nothing. "Although Premier Robert Fico (Smer-SD) declared war on high food prices in a memorable video from January 2024, the results are quite the opposite. Among the foodstuffs he had on the table for viewers, only rolls and butter have become cheaper since then, which can partly be ascribed to the lower 5 percent VAT rate. Conversely, the prices of eggs and Edam cheese have increased significantly, the latter being almost 6 percent more expensive since Fico's session last year. Although the Finance Ministry is striving to suggest to people via its statements that food inflation is record-low and that opposition politicians are only scaring them, not only the statistical data on which we base our conclusions, but also the experiences of people in shops confirm that prices are going up despite the reduction of VAT on basic foodstuffs," stated KDH MP Jozef Hajko. Referring to the Statistics Office's data, KDH pointed to the year-on-year (y-o-y) growth in the prices of several kinds of basic and most frequently purchased food. The price of bread rose by 1.2 percent y-o-y in May, while that of Edam cheese increased by 8.6 percent and butter by 24 percent. Significant increases in prices were recorded for foodstuffs that 19- or 23-percent VAT rates apply to. The price of mineral water jumped by 6.1 percent y-o-y, and hens' eggs were 29.9 percent more expensive than a year ago. The new sugar tax also brought higher prices for sweetened soft drinks, which went up by 26.6-44.6 percent. According to the KDH representatives, inflation in June was also reflected in the prices of food and soft drinks. In their opinion, the price jump may be partly related to the new financial transaction tax. They also pointed out that although the tax rate for most goods and services has increased to 23 percent, the Finance Ministry's latest estimates indicate that the amount of tax collected by the end of the year will be some €1.5 billion lower than expected when the budget was approved. ko/df