Faroese VAT cut lowers food prices, fuel taxes still suspended

The suspension of value-added tax on food and fuel in the Faroe Islands is now visible in retail prices, according to a report by the Faroese national broadcaster KVF.

Prices for groceries have fallen, and the tax suspension likely means VAT will no longer be applied to food. However, other staples—particularly meat, coffee, tea, and cocoa—have become more expensive, the Faroese statistics agency Hagstovan noted. Beef prices have risen the most.

The VAT on vehicle fuel was removed in mid-May, which may explain why price increases for car fuel have been lower than for household heating oil, KVF reported.