Sweden to temporarily slash VAT on food products

STOCKHOLM

Sweden's government said it planned to temporarily halve value-added tax (VAT) on food products to six percent in its 2026 budget to help households struggling with several years of soaring food prices.

The move is expected to enter into force on April 1, 2026 and last until Dec. 31, 2027.

"This means that all Swedes should have cheaper bags of groceries, and those who earn the least will see the biggest impact percentage-wise," the government said in a statement.

A family with two children would see their grocery expenses decrease by 6,500 kronor ($687) per year on average, it said.

Sweden has for several years experienced soaring food prices amid high inflation, the war in Ukraine and the COVUD pandemic.

The government has repeatedly urged food retailers to lower their prices.

Its announcement of a VAT reduction on all food products, from 12 to six percent, was expected to cost the government 16 billion kronor in lost revenue in 2026 and 21 billion kronor in 2027.

The announcement comes a year ahead of Sweden's legislative elections in September 2026.

The government said it would establish a commission to keep an eye on the evolution of food prices, and Sweden's Agency for Economic and Regional Growth would be tasked with improving competition in the sector.

"Previous VAT cuts show that the measure is costly, difficult to evaluate and affects different groups [in society] unequally", tending to benefit high earners more, the Commercial Employees Union said in a statement.