Assessing the Impact of a Possible VAT Increase on Agricultural Products

VAT accounted for about 33% of national public budget revenue in 2021. The Tax Code sets a standard rate of 20%, 8% for most agricultural products and 12% for accommodation and public catering. Differentiated rates along the same value chain, plus numerous exceptions and special deductibility rules, create gaps in the tax flow. Raising the rate on agricultural products could close some of them.

The study works with effective rather than statutory rates and focuses on general-equilibrium effects, not only first-round ones. It examines sectoral output, GDP, household consumption, relative prices, export competitiveness, budget components and redistribution, using a detailed, regionally disaggregated social accounting matrix. It asks which sectors and territories would be hit hardest and which parts of the budget system would lose most. Results are compared with a Business-as-Usual baseline, not with the pre-shock situation.