ZAGREB, Jan 14 (Hina) - Earlier this week, the Croatian parliament received a bill on changes to the Law on VAT decreasing the VAT rate from 22 to 20 percent.
ZAGREB, Jan 14 (Hina) - Earlier this week, the Croatian parliament
received a bill on changes to the Law on VAT decreasing the VAT rate
from 22 to 20 percent.#L#
If the parliament adopts the bill, the lowered VAT rate would be
applied as of January 1 next year.
The Finance Ministry, which is the formal sponsor of the bill, has
stated that the application of the new VAT rate requires the
completion of technical adjustment of both tax payers and the Tax
Administration, the improvement of the system of tax collection and
control, the ultimate goal being to improve tax discipline and
increase VAT revenue, as well as to compensate for the drop in VAT
revenue that will be caused by the lowering of the VAT rate.
Revenue from VAT makes up the biggest budgetary tax revenue and it is
expected to total 27.3 billion kuna this year. It is estimated that
the decrease of the VAT rate would reduce VAT revenue by 3 to 3.5
billion kuna.
The sponsor of the bill said that the lowering of the VAT rate would
have multiple macroeconomic effects - from a drop in prices and
improved economic competitiveness to the restriction of grey economy,
etc.
(Hina) rml sb