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In this article, we have estimated the price- and income-elasticity of demand for food products, and we have simulated the impact of a reduction in VAT on poverty and household welfare in Togo. As expected, results indicate that the compensated price-elasticities of demand are negative, in accordance with the inverse relationship between the price and demand of a given good. The income elasticities of demand suggest that cereals such as maize, rice, and processed cereals appear as necessity goods, whereas cereals such as millet, sorghum and fonio are inferior goods. The values of price- and income-elasticity of demand vary according to households’ place of residence and their poverty status. The results of the simulations indicate that the government’s policy of reducing VAT appears to be effective in improving household welfare and reducing poverty in Togo.