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VAT proposed to be reduced on staple foods and grains

The Ministry of Rural Development will propose that the VAT rate be reduced on staple food-items and grain, ministry state secretary Endre Kardeván said at an event organised by agribusiness Báki Agrocentrum on Monday.

Lowering the VAT on these items would reduce the size of Hungary's shadow economy, Kardeván said.

Hungary's previous government reduced VAT on staples such as bread, grain, flour, milk and other dairy products from 20% to 18% as of July 1, 2009. The reduction coincided with an increase of the main VAT rate from 20% to 25%.

The government aims to maintain and even raise the number of jobs in rural regions, improve competitiveness and food safety, and make the sector more independent, Kardeván said. The ministry wants to see more products with high added-value on store shelves in Hungary as well as abroad, he added.

He said he saw big opportunities for Hungarian farm products in Russia, adding that an agreement on the start of Hungarian meat exports to Vietnam could be signed within weeks. (MTI-ECONEWS)