Finland has confirmed that its anti-inflation strategy, to be launched in 2009, includes a provision to lower VAT on food from the present rate of 17% to 12%.

Moreover, the Ministry of Agriculture and Forestry (MAF), is proposing to introduce a consumer-friendly transparent pricing system, where the VAT rate for various goods is calculated at the "cash-register" rather than incorporated into the product's end-price.

"What we are considering is that all foods would display a price label that will show two cost figures. This label would include the price of an item of food excluding VAT, and the VAT charged on that particular item of food. Such a system makes it clear to the consumer how taxes affect a product's final price," said Sirkka Antilla, Agriculture and Forestry Minister.

The introduction of the proposed pricing system could coincide with the launch of the new lower VAT system.