Denmark's planned overhaul of food value-added tax would cost the treasury 17.4 billion kroner ($2.6 billion) a year, Tax and Growth Minister Jakob Engel-Schmidt disclosed in a parliamentary response, offering a precise tally after earlier estimates ranged between 15 billion and 20 billion kroner.
The Ministry of Taxation and Growth calculated that eliminating VAT on fruit and vegetables alone would reduce revenue by 2.6 billion kroner annually, while halving the rate on all other food items would account for the remaining 14.7 billion kroner. The previous SVM coalition government set aside a 6 billion-krone fund in January 2026 to begin phasing out or reducing food VAT, leaving a gap of more than 11 billion kroner between the allocated sum and the projected annual cost.
Implementation remains distant: the measure cannot take effect before 2028, as the tax authority requires a new IT system to process the differentiated rates.