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Press release, 12.11.2025
According to a nationwide survey by Norstat, 64% of Estonians believe that a cut in food VAT would reach consumers directly. The survey was carried out at the end of October.
"High taxes and input prices - such as the price of electricity - have led to a significant rise in prices in Estonia," said Nele Peil, CEO of the Estonian Merchants' Association.
"Today our neighbours Finland, Latvia and Sweden have all announced cuts to food VAT. The only country that, like Estonia, is instead raising VAT, is Russia. We are currently among the European countries with the highest VAT rate on food," Peil added.
"High VAT and rising production costs have led to a situation where cheap imported food is pushing local, high-quality food out of the market. This is not sustainable - not for consumers, producers or retailers," said Kerli Ats, Chair of the Board of the Estonian Chamber of Agriculture and Commerce.
"Every price hike hits our people harder than in the rest of Europe because of the high share of food in family expenditure. Cutting VAT on food would be a quick and direct measure that would help reduce the financial pressure on families," she added.
Young people believe in a VAT cut the most
The strongest belief that a VAT cut would reach consumers is found among 18-29-year-olds, 50-59-year-olds and lower-income groups. The idea is also supported above average by service and sales workers (72%), people on parental leave (70%), pensioners (71%) and pupils and students (72%).
The Norstat survey covered 1,000 people across Estonia and was carried out at the end of October 2025.
From the perspective of the Estonian food sector, cutting VAT is important in order to preserve jobs and support the welfare of Estonian people.
Most European countries have a lower VAT rate
In most European countries, food is subject to a lower VAT rate (around 0-15%). For example, in Finland it is 13.5%, in Germany and France 7%, in Sweden 12%, in Spain and Italy 10%, and in the United Kingdom most food is VAT-free. Estonia is just one of four EU member states that does not apply a reduced rate on food. The only EU country with a higher VAT rate on food than Estonia is Denmark, where it is 25%.
The Estonian Merchants' Association is a voluntary association founded in 1996 that brings together retail and wholesale trade companies operating in Estonia. The Association is a member of the Estonian Employers' Confederation, the Estonian Chamber of Commerce and Industry, and EuroCommerce.