Laurynas Vilimas, the executive director of the Lithuanian Trade Enterprises Association, told the daily that with the VAT rate cut to 9 percent, the traders, in their turn, could lower the prices of products by the same margin.
“Lithuania’s industry suffers if Lithuanians buy Polish meat in shops and it suffers a double blow if Lithuanians buy unaccounted Polish meat at marketplaces or elsewhere. Only one solution is possible in both cases – to eliminate economic benefits of buying the product of non-Lithuanian origin outside shops, that is, to lower the price,” Vilimas said.
The association estimates that with the VAT levied on meat hiked to 21 percent, from 5 percent, in 2009, the budget generated extra 150 million litas (EUR 43.48m) over three years. However, it also lost more than 100 million litas due to a decline in the consumption of meat products.
Lithuania's new government is considering a possibility to introduce reduced VAT rates for fresh meat and hotels from 2013.