Differentiated VAT rates on food – an inquiry launched

Summary

• The Swedish government has issued terms of reference for an inquiry into differentiated VAT on foodstuffs—applying different rates to different food types, with essential items taxed at a lower rate. The move follows Sweden’s temporary halving of food VAT from 12% to 6%, in force from 1 April 2026 until 31 December 2027. The inquiry examines whether a more selective, potentially permanent system could replace or complement that temporary reduction. [taxexpenditures.org], [nordiskpost.com]
• Finance Minister Elisabeth Svantesson framed the aim as keeping down the cost of “particularly necessary” groceries that households buy weekly, amid years of high food prices. The special investigator, judge Ann Linders, is tasked with defining food categories, proposing rate structures, and analysing socioeconomic consequences. She must also assess tax neutrality, boundary/classification problems, tax-fraud risks and administrative burden for companies, with a report due by 22 December 2026 at the latest. [nordiskpost.com], [samnytt.news]
• Commentators are sceptical: the Tax Expenditures Lab argues Sweden already deviates heavily from its uniform 25% rate, with reduced rates costing nearly SEK 120 billion in foregone revenue, and warns “once you have started, it is hard to stop.” The food industry body Livsmedelsföretagen cautions that deciding which products are “essential” risks arbitrary classifications and added complexity, questioning whether the state should determine which food items matter most. [taxexpenditures.org], [samnytt.news]

• Tax Expenditures Lab
• NordiskPost
• Samnytt