Hungary cuts VAT on pork offal to boost consumption
Hungary’s Ministry of Agriculture said in a statement: “One of the main aims of the civil government is to increase domestic consumption by providing people with cheap and affordable food, and to bring more Hungarian food from a high-quality, healthy environment to the family table.”
Tax cuts to boost consumption
“The other big winner of the tax cuts is agriculture, because both the food economy and agriculture are enjoying more opportunities as a result of the tax cuts and the black economy is shrinking, while people can buy more and increase their consumption,” the ministry added.
The latest tax reduction applies to pork offal and consumable by-products, such as liver, brain, tongue, trotters and pig feet. In addition to these, the ministry also decided to reduce the VAT on fish for consumption. In total, the two tax cuts are expected to generate savings of at least HUF35,000 (€113) to HUF40,000 (€129) per year for an average Hungarian household, according to data released by the ministry.
In 2014, the Hungarian cabinet decided to cut the VAT on live pigs and half carcases from 27% to 5%. In another move to boost domestic consumption of this meat, the tax on pork meat was reduced to the same 5% rate, starting on 1 January 2016.
State assistance for pig breeders
Over the past few years, the Hungarian government has initiated a number of programmes to boost pig breeding and consumption of pork in Hungary. Some of the projects have included the Agriculture Ministry’s flagship project to double the country’s pig population from the current 3 million head to 6m head between 2014 and 2020.
The ministry said the programme’s aim was to assist Hungarian pig breeders in their marketing activities, finance development of domestic genetic bases, and create new quality assurance systems. One of its additional objectives is to promote the breeding of Mangalica pigs. Furthermore, the authorities said they supported investments by local pork meat processors and provided them with assistance in expanding to new foreign markets.
In 2014, the government earmarked some HUF1.6bn (€5.2m) to launch the programme for the pig sector. For the past year, the programme was allocated a budget of HUF1.2bn (€3.9m), as announced by Hungarian Minister of Agriculture Sándor Fazekas.
Despite the government’s efforts to promote pork meat consumption in the domestic market, poultry meat remains the most popular type of meat in Hungary. With an annual consumption of about 32kg per capita, it precedes pork meat, which has an average per capita consumption of some 28kg per year, according to figures from local industry association Poultry Products Council (BTT).
