Supermarkets want tax cuts

Supermarket chains are calling on the government to reduce taxation on some basic food items in order to ease the burden on consumers.

In effect, that brings back to the table the proposal the sector had indirectly made in September through a statement by the Research Institute for Retail Consumer Goods (IELKA) – without the government accepting it to date.

Kathimerini understands that the entrepreneurs of the organized food retail industry have proposed to the government the reduction of the value-added tax for a certain period of time on key food commodities. Nowadays most basic food items, such as milk, flour, pasta, meat, fish, vegetables, fruit, sugar etc, incur a VAT rate of 13%, while other products fall into the 24% VAT bracket.

The supermarkets’ proposal does not concern shifting the basic food items to the lowest bracket with the 6% rate, but the creation of a special bracket with a rate around 10-11%. The commodities that could be included in this bracket are related to cereal (flour, baking products, pasta etc), as these groups of products have seen major hikes recently, alongside dairy and cheese products.

Sector representatives told Kathimerini they are constantly receiving new price lists from suppliers, concerning both popular brands and own-label products.

However, Finance Ministry sources rule out a value-added tax reduction or shifting some products from the 24% bracket to the 13% one. They note that most commodities are already in the reduced bracket, while the current hikes are partly the effect of the international energy crisis.

In a video conference between supermarket chain representatives and Development Minister Adonis Georgiadis on Monday, the former did raise the issue of energy costs, as the additional burden is estimated at several million euros per chain. The sector is awaiting clarifications over how and to what extent it will be supported this month, while also expecting some support for February too.