When asked about the possibility of lowering VAT from 17% to 3% for protective equipment, which represents a basic necessity according to CSV MP Jean-Marie Halsdorf, the government confirmed there were no plans to modify the tax rate for PPE such as masks.
Minister of Finance Pierre Gramegna explained both European and national legislation did not leave sufficient room for interpretation which would allow these items to benefit from a reduced rate.
As a consequence, protective items such as masks, gloves or antibacterial gel will not be subjected to less tax. Gramegna pointed out that reducing tax on these items would not necessarily benefit the end consumer, as businesses could absorb the drop in price and consequently increase their margins.
Despite this, Gramegna said the distribution of masks to residents and cross-border workers had been more effective than a drop in VAT on these products, particularly in achieving the aim of encouraging compliance with sanitary measures. He said an indirect incentive such as a VAT reduction would not necessarily have the same effect.
