MINISTRY OF ECONOMY WARNS ABOUT WRONG IMPLEMENTATION OF VAT

( Editorial: --> 3112 ) Zagreb, 8 January (Hina)- On Thursday Croatian Ministry of Economy found unacceptable raising of prices by the amount of Value Added Tax. In a statement released on Thursday, Ministry of Economy warns that the companies that raised the prices of their products and services by the amount of VAT have made a mistake in the calculation of VAT. Namely, they failed to first deduce the now obsolete turnover tax and pre-tax, which have been superceded by VAT. By raising the prices those companies have transferred part of the tax burden on the consumers in order to make extra profits from tax rebate. VAT, at a single rate of 22 per cent, was introduced on 1 January 1998. Since than prices of many products have been raised by that amount. In its statement, Ministry of Economy advises all the economic subjects, and especially those owned by the Republic of Croatia and local Government bodies not to raise the prices of their products and services until they have calculated real production cost by deducing the pre-tax. (Hina) jn mr 082021 MET jan 98