Zero VAT fruit and vegetables unenforceable

The plan to reduce VAT on fruit and vegetables from 9% to 0% is not only complicated, it will not help people to eat healthier. This is according to a study by SEO.

The neutrality principle in VAT states that the government cannot pursue specific goals through differentiated VAT rates, such as encouraging healthy lifestyles. This makes it legally unfeasible to differentiate a VAT rate for fruit and vegetables. Moreover, the boundaries between different products are often blurred, making it difficult to make a demarcation without risking legal proceedings and large budgetary costs. Depending on the variant chosen, the budgetary costs are between €550 and €950 million. The Tax Administration also sees substantial risks in implementing and enforcing the plan, even if a large number of staff are deployed. 

Health effects small

The health effects of a small increase in fruit and vegetable consumption (4 per cent) are likely to be limited. Alternative instruments are available, such as taxes on unhealthy food (sugar tax), restrictions on the availability of unhealthy food and subsidies on fruit and vegetables, which may have greater effects and involve less budgetary burden. 

The government will carefully study the research results and the Lower House will receive a substantive response before the summer.

Read the full report: 'A zero VAT rate for fruit and vegetables'