The Swedish government wants to temporarily halve the food VAT to ease the financial burden on households. Now João Quelhas, a PhD student in economics at Stockholm University, tells SVT Nyheter about Portugal’s experience when the country reduced VAT on food.
Photo: Johanna Säll/Stockholm University
At a press conference this week, the government presented a temporary reduction of the food VAT from 12 to 6 percent, set to take effect on April 1, 2026.
Similar measures have already been tried in other countries. In Portugal, VAT on certain food products was reduced in 2023, a reform that has since been studied by PhD student João Quelhas. Together with colleagues, he analyzed the effects in a study published in the scientific journal Journal of Public Economics.
These measures always spark some debate among economists
In an interview with SVT Nyheter, João Quelhas describes the Portuguese VAT cut:
”The government’s goal was to reduce inflation especially in food prices, and it was effective. But these measures always spark some debate among economists.”
In Sweden, three major food retailers dominate the market, and competition is therefore not as strong as in Portugal, where there are more small retailers.
”If there isn’t much competition, the pass-through may be smaller,” says João Quelhas, ”because there are no small retailers taking up the full VAT cut lowering prices below those of the larger ones.”
