What Austria’s new lower VAT on food could mean for your shopping bill

Austria will cut VAT on selected staple foods to 4.9 percent from July 1st, aiming to ease household costs. AdvertisementThe government expected the VAT cut to be passed on to customers. Eibinger-Miedl expected the VAT cut to reduce inflation by 0.1 to 0.2 percentage points. A VAT cut does not automatically guarantee a price cut in the supermarket. To finance the planned VAT cut, costing up to €400 million, the government planned to introduce charges on non-recyclable plastic and a parcel levy for third countries.