IMF advises Denmark against cutting food VAT

Food prices in Denmark may not see tax cuts anytime soon. The International Monetary Fund advises Denmark against lowering VAT on food.

A report from the organisation warns against this tax reduction. The report says cutting food VAT would cost the state too much money. Reversing the tax cut later would also be very hard.

Higher-income households would benefit the most from lower tax rates. Food prices have already fallen since the start of the year. This price decline makes a tax cut less necessary now. The findings were reported by The Copenhagen Post.