Labor Minister Questions Impact of Food Tax Cut, Cites Risk of Retailer Profits
OSLO, Norway – Industry Minister Cecilie Myrseth of the Labor Party is raising concerns that a reduction in Norway’s food value-added tax (VAT) could disproportionately benefit grocery store owners rather than consumers, potentially shifting billions of kroner into retailer profits. Myrseth’s comments come amid ongoing debate over the rising cost of food in Norway and potential government intervention.
The debate centers on whether lowering the VAT on food would translate into lower prices at the checkout.Myrseth argues that such a cut carries a significant risk of enriching already profitable grocery chains, referencing recent research supporting this claim. This stance positions her in contrast with previous assurances made by some industry players regarding price reductions following a VAT cut.
myrseth referenced a recent E24 examination featuring former Minister of Culture and Equality Abid Raja, in which grocery chains pledged to pass on any VAT savings to customers. “I notice that some players in the industry guarantee that a VAT cut will result in a corresponding reduction in food prices. Well, then I miss the same clarity on the answer to the question of why food prices have increased so much in the first place,” she stated in an email released through the communications department.
The Minister’s skepticism underscores a broader concern about the complexities of the Norwegian grocery market and the potential for limited price competition. The Labor Party’s position suggests a preference for choice measures to address food affordability, rather than relying solely on VAT reductions. The issue remains a key point of contention as the government weighs options to alleviate the financial burden on Norwegian households.
