The Central Economic Council (CEC), representing trade unions and employers, has voiced strong opposition to a potential harmonisation of lower VAT rates.
The proposal, considered as part of budget planning, suggests aligning the lowest VAT rates at 9%. Currently, essential goods like food are taxed at a 6% rate. The CEC estimates that such a reform would increase the cost of a shopping basket containing foodstuff from €106 to €109.
Low-income families would be hit hardest by the change. According to the CEC, 77% of the consumption budgets of the poorest 25% of households is spent on essentials such as food, energy and housing, expenditure that is unavoidable.
The council also warns that raising VAT could result in the loss of thousands of jobs while generating only limited budgetary returns.
