(Bloomberg) -- Portugal’s government is considering cutting the country’s value-added tax rate to help lower food prices in the southern European nation, Prime Minister Antonio Costa said.

“We are available to contribute to this goal with the reduction of the VAT,” Costa said at a debate in parliament in Lisbon on Wednesday. He didn’t provide details about the possible tax cut. 

The Socialist government, which holds a majority in parliament, is also working with retailers and food producers to try to bring down prices, Costa said.

Read more: Portugal’s Sonae Says Supermarkets Will Limit Price Increases

Portugal currently has three VAT rates: a standard rate of 23%, a rate of 13% and a reduced rate of 6%. The lower rates are applicable to some food products. Portugal’s average annual inflation rate reached 7.8% in 2022, the highest in 30 years, according to the country’s statistics institute.

©2023 Bloomberg L.P.