Žemlja cenejša, žemlja z maslom ne: kako (in za koga) deluje prepolovljen DDV

In July 2026, Austria introduced a significant change to its value-added tax (VAT) system, reducing the VAT rate on selected food products from 10% to 4.9%. This measure was aimed at alleviating the burden on households affected by years of rising food prices. The new lower rate applies primarily to basic food items such as milk, butter, yogurt, eggs, bread, wheat flour, rice, pasta, potatoes, most fresh and frozen vegetables, certain types of fruit, and table salt. These products were marked clearly in stores to help consumers identify them easily. However, despite this reduction, many Austrians expressed skepticism about its impact, particularly because essential items like meat, fish, cheese, sweets, coffee, non-alcoholic beverages, and numerous other goods remained subject to the higher 10% VAT rate.

The decision came after several years of notable increases in food prices, which had risen by approximately 18% between 2022 and 2025—more than the overall inflation rate during that period. In early 2026, inflation had dipped close to 2%, but it rose again to around 3.7% later in the year. Low-income families, who allocate a larger portion of their budget to food, felt the effects of these price hikes more acutely. The government's move to reduce VAT on basic food items was intended to provide some relief directly to consumers, with the hope that they would notice the difference during their next shopping trip.

Despite the policy change, consumer reactions varied widely. Some shoppers, like an elderly woman interviewed at a Hofer store in Stainz, noted little visible difference in prices. She questioned whether cheaper milk would make much of a difference when meat continued to rise in cost. A middle-aged man also voiced his frustration, pointing out that while the price of apples or milk might have decreased slightly, the cost of meat had increased significantly over time. He sarcastically asked if the government’s action meant everyone would become vegetarian.

On the other hand, a young mother from Deutschlandsberg acknowledged that even small savings could be beneficial. She mentioned that while the reduced VAT on items like vegetables, yogurt, and bread was welcome, it wouldn’t lead to substantial monthly savings given the high cost of living in Austria. Many residents in border regions often shop abroad due to lower prices in neighboring countries, highlighting how the VAT adjustment alone might not address broader economic challenges.

According to official estimates, the government expects the measure to result in an average annual saving of around €100 per household, assuming retailers fully pass on the VAT reduction to consumers. However, the Austrian state will lose approximately €200 million in revenue this year and an additional €400 million next year due to the lower VAT rates. Officials anticipate that this loss will be offset by reduced inflation, increased purchasing power among households, and consequently higher consumption levels.

The implementation of the lower VAT rate has not been without complications. Retailers must adjust thousands of product prices accordingly, with some stores needing to revise the prices of nearly 16,000 items. While companies like Billi promise to pass on all savings to customers, including rounding down prices where appropriate, the complexity of determining which products qualify for the reduced rate remains a challenge. For instance, plain yogurt qualifies for the lower rate, but fruit-flavored varieties do not. Similarly, baked goods can only benefit from the reduced rate if they contain no more than 5% fat or sugar in dry matter, complicating the classification process further.

This situation reflects a broader trend across Europe, where multiple countries have implemented temporary or permanent changes to food taxation in response to rising costs. Spain and Poland introduced zero VAT on basic food items, Cyprus extended zero-rate periods for selected products, Sweden plans to cut its food VAT from 12% to 6% next year, and Latvia has lowered taxes on bread, milk, eggs, and poultry. Despite these efforts, the effectiveness of such measures in addressing long-term inflationary pressures remains debated among economists, who note that while impactful for specific sectors, their influence on overall inflation is relatively modest.