Parliament approves increase in VAT to 20 percent

The basic VAT rate will be temporarily increased from 19 percent to 20 percent as of January 1, while the 6-percent VAT rate on farm-gate food sales will be abolished, parliament decided on Tuesday, November 30.

The basic VAT rate will be temporarily increased from 19 percent to 20 percent as of January 1, while the 6-percent VAT rate on farm-gate food sales will be abolished, parliament decided on Tuesday, November 30.

The VAT rate increase is part of the government’s package aimed at consolidating the public finances. The VAT hike is intended to be reversed once the deficit falls below 3 percent of GDP, which is expected to happen in 2013, the TASR newswire wrote.

The largest parliamentary party, Smer, unsuccessfully attempted to replace the VAT increase with an extraordinary tax on banks. Meanwhile, the Association of Employers’ Unions (AZZZ) and farmer unions proposed increasing the VAT rate to 21 percent, but keeping the excise tax on beer and agricultural diesel the same. Almost 200,000 people have signed a petition demanding that the tax rate on beer be left unchanged.

Source: TASR

Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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