Austrian lower house approves halving VAT on essential food items

Austria's lower house of parliament approved ​legislation on Thursday halving ​value-added tax on foods the conservative-led ‌government ​deems essential, the main hurdle the inflation-fighting measure needed to clear to become law. * The text reduces VAT ‌on items including milk, bread, eggs, rice, flour and some fruits and vegetables to 4.9% from 10% as of July 1.

* The three ruling parties - the ‌conservative People's Party, the Social Democrats and the liberal Neos - approved the legislation ‌while the two parties in opposition, the far-right Freedom Party (FPO) and the Greens, did not. * The government estimates the measure will cost around €400 million ($464 million) and save the average household ⁠roughly €100 ​per year. It ⁠plans to fund it in part through a levy on retail parcel deliveries that could ⁠raise about €280 million a year and which has yet to clear the lower house.

* ​The Greens said the measure did not go far enough in helping ⁠low-income households and criticised the fact that funding for it has yet to be secured. * ⁠FPO ​lawmaker Michael Fuertbauer criticised the selection of items that qualify, saying: "Rye bread will benefit, rye flour will not. Fresh French fries will benefit, ⁠frozen French fries will not. Salt will benefit, herb salt will not. Butter will benefit, ⁠herb butter ... ⁠will also!"

* The legislation must still clear the upper house and be signed into law but there is little ‌doubt that ‌it will. ($1 = 0.8626 euros)

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