It should be known by mid-May whether a lower 7% VAT rate will be divided into two – the additionally reduced one which would tax basic nutrition products and the increased one for other products to which a unique lower rate is currently being applied.
Pobjeda newspaper writes that it will be known by then whether excise duties on cigarettes, alcohol and soft drinks will be increased, as well as the tax on excess housing. The current tax relieves will be reconsidered, as well.
Asked how and when the planned 7% VAT rate reduction/increase is to be applied, the Ministry of Finance said that it currently could not precise what measures would be accepted.
“We are considering all the measures, but we cannot be specific which of them will be accepted, or the amounts in question or the deadlines for implementing new solutions. We expect that the fiscal strategy will be prepared by mid-May and sent to the government,” the ministry told Pobjeda.
Currently, the lower 7% VAT rate is applied to milk, bread, fat, oil, sugar and medicines, including those for veterinary use, other than those issued by the Health Insurance Fund, as well as orthotic and prosthetic aids, and medical devices that are surgically implanted in the body, other than those issued by the fund, then textbooks and teaching aids, books, monographs, accommodation services in hotels, motels, apartment hotels, resorts, campsites and villas.
The lower rate is also applied to drinking water, except for bottled water, daily and periodic press, except those with mostly advertising content, public transport services and hygiene, funeral services and products related to them, copyrights and services in the field of education, literature and art, tickets to cinema and theatre performances, concerts, museums, fairs, amusement parks, exhibitions, zoos and similar cultural and sports events, use of sport facilities for non-profit purposes, animal feed, fertilisers, plant protection products, seeds for reproduction, seedlings and breeding stock.
