Hungary Considers VAT Cut on Produce as Plant-Based Sector Gains Momentum
Hungary's new government plans to reduce VAT on fruits and vegetables, with potential expansion to legumes, as plant-based advocates make progress in policy shifts.
The Hungarian government is considering a significant reduction in value-added tax on fruits and vegetables, from 27% to 5%, with legumes potentially included in the future. This move follows the recent parliamentary election, which brought the Tisza Party to power and created an opportunity for policy changes advocated by the Hungarian Association of Plant-Based Food Producers and Distributors, NÉGYOSZ.
Background on VAT Reduction
According to NÉGYOSZ Managing Director István Miskolczi, the new government's plan to cut VAT on produce is a major step forward for the plant-based sector. Hungary currently has the highest standard VAT rate in the European Union, making this reduction a significant development. The potential expansion of the VAT cut to legumes is also being considered, which could further support the growth of the plant-based industry.
Policy Shifts and Advocacy
NÉGYOSZ has been engaged in structured discussions with the Ministry of Agriculture, summarizing the challenges faced by the plant-based sector and proposing solutions. The organization has spent years lobbying for policy changes and has pointed to progress in Budapest, where the municipality has increased its focus on plant-based options in school food procurement. NÉGYOSZ represents domestic and multinational producers and distributors of plant-based products, including Danone, and has highlighted subsidy imbalances and public catering rules as barriers to the sector's growth.
Inspiration from Denmark
NÉGYOSZ has cited Denmark's Action Plan for Plant-Based Foods, launched in 2023, as a template for Hungary to follow. The association has been inspired by Denmark's national strategy and hopes to see a similar approach in Hungary. A Sustainable Food Strategy is seen as key to driving development and progress in Hungary's food system, and NÉGYOSZ is working to bring about such a strategy. The organization has also been involved in drafting a climate law, which is expected to include language on food systems, and is working closely with civil society groups to ensure the legislation addresses the needs of the plant-based sector.
Climate Law and Food Systems
The new climate law, initially scheduled for June but now postponed to November, is expected to be adopted by parliament in December. NÉGYOSZ has been working to ensure that the legislation includes wording on food systems, and it appears that these efforts have been successful. However, the organization is waiting for the final adoption of the law before celebrating its achievements. The inclusion of food systems language in the climate law is seen as a crucial step forward for the plant-based sector, and NÉGYOSZ is hopeful that this will lead to further policy shifts in support of sustainable food production and consumption.
