“When the change in the VAT rate comes into effect next year, we expect that in retail, the reduction in prices of fruit, vegetables, fresh meat, and fish could reach 9 or at most 10 percent” – replied Zvonimir Savić, director of the Sector for Financial Institutions and Economic Analysis of the Croatian Chamber of Economy, to Lider’s inquiry.
Savić emphasizes that regarding the announced tax relief, “the most visible part relates to the reduction of the VAT rate on fruit, vegetables, fresh meat, and fish from 25 to 13 percent, as this will be directly felt by all residents, primarily those with lower incomes.”
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He further explains that the largest part of income “is allocated to food and housing, so the reduction of VAT on the mentioned food products and the consequently expected reduction in prices of these products should have a positive effect on the population in terms of increasing disposable income and growing purchasing power.”
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He also notes that some countries in Central and Eastern Europe already have reduced VAT rates on food products; Hungary and Slovakia have lower VAT on meat and fish, while Poland and Latvia have lower VAT rates on fruit and vegetables – “thus, the Government is implementing measures that are already present in some countries”.
