Prime Minister Matti Vanhanen (Centre) has said he would also be willing to see a reduction in the VAT levied on restaurant food, down to 12% from the present 22%.
Vanhanen told the Oulu-based newspaper Kalevala that the Centre Party would not unpick the already-agreed reduction on store-bought foodstuffs from 17% VAT to 12%, which is to come into effect from October.
In the interview, Vanhanen does not speculate on where the money for the reduction in VAT revenue on restaurant food might come from. In his view this is an internal matter for the government.
"The condition for such a reduction in tax is that the monies can be found from elsewhere in the tax base. It cannot simply go into the pockets of those buying food", said the PM.
Minister of FinanceJyrki Katainen, the chairman of the National Coalition Party (the Centre's main government partner in the four-party coalition), proposed on Monday that VAT on food be reduced to 14% instead of the original 12%, but that the reduction be across the board on store and restaurant purchases.
There are fears that the original design, in which there were to be no relaxations on restaurant VAT, could cause too great a gap and would spark significant job losses in the restaurant branch.
