foodwatch asking EU to open up option of 0% VAT on fruit and vegetables
foodwatch is asking the European Council to render possible 0%-VAT for non-processed fruit and vegetables when revising the EU VAT framework so that Member States are able to subsidise these healthy food choices.
Tackling obesity and other Non-Communicable Diseases (NCDs) is one of the greatest long-term health challenges EU Member States face. Weight problems and obesity are increasing at a rapid rate in most of the EU Member States, with estimates of 51.6 % of the EU’s population (18 and over) being classified as overweight in 2014 . According to estimates from the World Health Organisation’s (WHO) Childhood Obesity Surveillance Initiative (COSI), around 1 in 3 children in the EU aged 6-9 years old were overweight or obese in 2010 . It is estimated that 7% of national health budgets across the EU are spent on diseases linked to obesity each year.
Promoting healthy diets is considered a critical action area for policy-makers in this context. Low fruit and vegetable consumption is a major concern, with only 14 percent of the EU population meeting the recommendation of five portions of vegetables and fruit per day.
Under current EU law, the minimum VAT is 5%
EU Member States have taken different approaches and adopted national strategies to solve the NCD-crisis. There is growing evidence on the effectiveness of prevention policies, so we are finally seeing more Governments starting to reshape food environments to make the healthier choice, the easier choice. Areas of action range from marketing restrictions for unhealthy foods, interpretive front-of-pack nutrition labels, minimum standards for school- and kindergarten-meals and fiscal measures like health-related food taxes. Evidence shows the need of a comprehensive strategy; there is no „silver bullet“ to reducing obesity. Unfortunately, Member States have very limited room for manoeuvre in terms of fiscal measures - more precisely on subsidies for fruits and vegetables.
According to the WHO, targeted subsidies on fruit and vegetables emerge as one of the policy options with the “greatest potential to induce positive changes in consumption”. The most tax-efficient way to subsidise unprocessed fruits and vegetables is to lower the Value Added Tax (VAT). Some Member States have reduced their VAT rates on fruit and vegetables to the minimum level allowed by European Union law. But most of the Member States have no allowance to reduce rates below 5 percent.
foodwatch asks EU to put fruit and vegetables on the VAT exemption list
Fortunately, that situation could change. The European Council is currently revising the VAT framework . This might also include a so called “positive list” for product groups that can have a 0 percent VAT rate. For this reason, foodwatch has written to all EU Member States to ask for their support for the inclusion of unprocessed fruits and vegetables in the VAT exemption (0%) list.