Austrian government says to halve VAT on essential food items

VIENNA, Jan 14 (Reuters) - Austria's conservative-led coalition government plans to halve value-added tax on certain essential foodstuffs to less than 5%, it said on Wednesday, as it tries to tackle the cost of living with inflation hovering around 4%.

The three-party coalition said the move, which will cost around 400 million euros ($466 million) a year, would be funded by planned levies on non-recyclable plastic and on parcels from countries outside the European Union.

The government has yet to specify which foodstuffs the measure will encompass.

($1 = 0.8590 euros)